With the general insurance industry seeing a slowdown, SBI General Insurance Managing Director and Chief Executive Officer Naveen Chandra Jha spoke with Subrata Panda and Aathira Varier in Mumbai about how the company has managed to grow above the industry and its strategies for navigating the current challenges. Edited excerpts:
How has the year been and what are your growth plans for the rest of the year?
This year has been good, but we had expected even better numbers and the industry faced a slowdown. We have grown by around 14 per cent Y-o-Y, against the industry’s 11 per cent. The best part is that whatever we had strategized at the beginning of the year has yielded results but we still have a long way to go. We are looking to grow at a better rate than the industry as far as the top line is concerned. On the bottom line, our profit in the first half of FY25 was seven times the profit in the same period last year. For FY25, our target is to increase profit by at least two-three times over last year’s.
How did you manage to grow your profitability by seven times?
Last year, we identified loss-making businesses where we needed to scale back. We chose to explore territories where others may not see immediate value. We focused on expanding into regions where every company doesn’t have a presence, by leveraging the extensive reach of the SBI network to establish our foothold.
Which are some of the segments you have exited from?
We haven’t exited any segment but in certain businesses that have historically been highly unprofitable, we have re-evaluated our approach. We have become more aggressive in focusing on areas where we thought we should create our own market. Our strategy has been focused on geographies where many companies have yet to take a strong position, and we see an opportunity to establish a leadership role.
What are the priority segments for the company?
Health and motor insurance will continue to be our two most important segments. In addition, we are focussing significantly on the personal accident segment, as well as fire and property insurance. We are also strengthening our presence in the engineering insurance sector.
We are exploring new opportunities that may arise in the next 3-4 months. We also have expansion plans in place and, where we are performing well, we aim to establish a physical presence next year.
What are your growth targets?
We want to grow better than the industry. Having said that, we are very mindful of the quality of business we pursue. If we focus solely on numbers, it won’t lead us in the right direction. Our goal is to achieve consistent, sustainable performance. We don’t want to simply secure business today and then realise that we haven’t made the right choices. To ensure this, we are conducting extensive research to identify the types of business that align with our long-term objectives.
What has been the experience with surety bonds business?
The surety bond business involves significant risk, so we are approaching it cautiously, with the support of reinsurers. We expect that as the business matures, the demand from customers and the offerings from insurance companies will align more closely. Over time, as both sides better understand the dynamics, it will become clear that insurance companies, which are taking on larger risks compared to banks, cannot offer the same rates. We are actively working through these challenges and are focused on growing this segment. We see the surety bond business becoming a key area of focus in the next 3-4 years.
What is your strategy for the health segment?
Currently, retail health constitutes just 25 – 26 per cent of our health business and we want the share to go up to 40 per cent by the end of next year.
How are you gearing up for YONO 2.O of SBI?
We are in the process of transitioning all banca products to YONO. Our strategy is clear: everything in banca will be sold digitally. By moving everything to YONO, we aim to create an end-to-end digital experience that offers both an excellent customer experience and full transparency.
IPO plans…
I wouldn't say there are any immediate or clear plans at the moment. However, as Irdai has indicated, we need to be prepared and chart a path forward.