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SBI Life in marketing talks with banks

Our Bureau

BANGALORE, Nov. 13

SBI LIFE has begun tying up with public, private sector and cooperative banks for providing lifeinsurance to account holders and for distribution of life insurance products.

Speaking to newspersons here on Wednesday, Mr R. Krishnamoorthy, Managing Director, SBILife, said that negotiations were under way with some of the public sector and private sectorbanks. He, however, declined to name any of the banks.

The insurance was for offering cover to customers availing themselves of housing loans. Theproduct that was being offered was the Super Suraksha, a term plan, covering the entire tenor ofthe housing loan.

Mr Krishnamoorthy said that SBI Life had already entered into agreements with most of the SBIassociate banks to provide this kind of cover to both deposit holders and housing loan customers,the latest being the State Bank of Mysore.

Further, he said that SBI Life was also negotiating with the public sector companies to providegroup insurance cover to the employees. He said SBI Life's group insurance cover would includethe spouses of employees. Conventional group insurance provided risk cover only to employees.

Similar covers were also being offered to the State Governments. These include managingpensions and gratuity liabilities of the State Governments. Currently, such liabilities of the StateGovernment are unfunded. Among the States that have shown interest in taking these kinds ofinsurance policies with SBI Life were Andhra Pradesh Tamil Nadu and Karnataka, he said.Further, SBI Life was working out methods for simplifying premium payments. These includefacilities for making premium payments through the ATM networks of banks, he added.

So far, the bulk of the SBI Life's premium income accretions were driven by term plans. However,pick-up was also taking place in saving-linked covers, including specialised covers such as theSBI Life Scholar. But at least 60 per cent of the accretions in the savings-linked policies includingchildren's policies came from Andhra Pradesh, Tamil Nadu, Karnataka and West Bengal, headded.

Among the most preferred saving-linked policies of the SBI were covers that offered increasingsum assured plans. These plans provide an automatic hedge against inflation, with a gradedincrease in premiums along with the rising covers. Mr Krishnamoorthy said that SBI had collectedpremiums of Rs 51 crore in the current financial year through its 11 product lines covering bothterm plans and saving-linked covers. So far, it has settled 11 claims, he added.

SBI Life is currently capitalised at Rs 125 crore, and has an authorised capital of Rs 250 crore.Responding to a question, he said this capitalisation was sufficient for the current level ofbusiness.

Bancassurance distribution of insurance products through banks would provide at least twothirds of the critical mass of premiums to SBI Life. A 3,000-strong agency force would account forthe remaining, he added.