SBI General Insurance has broken even in six years by recording a net profit of Rs 153 crore in 2016-17.
In 2015-16, the joint venture between the country’s largest bank State Bank of India and Australian major IAG, had suffered a loss of Rs 120 crore.
Backed by retail, corporate and SME business, SBI General Insurance had recorded jump of 28 per cent in its gross premium to Rs 2604 crore in 2016-17 as against Rs 2040 crore mobilised in 2015-16.
Pushan Mahapatra, MD& CEO,SBI General, said multiple steps like better risk selection, expense control, efficient claim handling and reinsurance management have resulted in the profitability of the company.
The company had succeeded in bringing down its underwriting losses by almost 50 per cent from Rs 375 crore in 2015-16 to Rs 197 crore in 2016-17.
At the same time the investment income of the company has risen by 31 per cent to Rs 345 crore during the year.
“We have successfully brought down our loss ratio across the portfolios and intend to have underwriting profit in next three years. We will guard our risk appetite and pricing,’’ said Mahapatra .
The company has a combined ratio of around 115% during the reporting period.
SBI General is eyeing for a 30 per cent growth in the highly competitive domestic market which would see three more players joining the industry.
The company has mobilsied 56 per cent of the its business through bancassurance channel, 21 per cent through agency and another 11 per cent through brokers.
The general insurer has crop insurance portfolio of Rs 312 crore in 2016-17.
“We expect the loss ratio to be below 100% in our crop insurance portfolio and we have profitability in the business,’’ said Mahapatra adding that currently the company is into crop insurance in six states and would double the number of states in 2017-18.
Speaking about the impact of the merger between SBI and six of its associate banks, Mahapatra said there wouldn’t any as the SBI General has already access to the branches of associates for doing business.
The foreign partner IAG is currently evaluating to increase its stakes to 49% from 26%.
Among the eighteen private general insurance companies, while twelve companies reported net profits, the remaining six companies incurred net losses during 2015-16.
Source-Asia Insurance Post