The general insurance company is a subsidiary of State Bank of India. SBI's life insurance arm was listed in FY18
Private general insurance company SBI General Insurance, after posting its maiden underwriting profit in FY18, is looking to bring out its public issue in FY20. In an interaction with Moneycontrol, Pushan Mahapatra, MD & CEO, SBI General Insurance, talks about the growth strategy in this fiscal. Excerpts:
Q. What was the reason for the jump in profits? Have the accumulated losses been wiped off?A.
We posted a profit after tax (PAT) at Rs 396 crore in FY18 compared to Rs 153 crore in FY17. This was primarily due to an extraordinary income of Rs 131 crore. Moving towards an underwriting profit for the first time has been a positive development.Over and above this, we have also recorded a lower loss ratio and minimised our operating expenses further. In terms of the accumulated losses, a little over Rs 50 crore remains which will be wiped off.
Q. Does that set the stage for your initial public offering?A.
We expect to come out with our IPO during FY20. Our promoter (State Bank of India) has said the IPO process will be conducted in FY20.related news
Q. In terms of segments, does motor insurance dominate the portfolio? A. Among the various lines of business, motor insurance had the maximum share of the pie at 28 percent. This was followed by fire insurance at 23 percent and crop insurance at 20 percent. Further, health insurance and personal accident came at 14 percent each for FY18.
Q. Last year, insurers saw an increase in demand for liability covers. Will you be focussing on this line of business in FY19 and is there a plan to enter the government’s personal accident scheme?A.
While volumes are small, growth rates are high for businesses like liability and marine. In FY19, we expect to grow further in health, motor as also the small and medium enterprises segment.In case of Pradhan Mantri Suraksha Bima Yojana, the personal accident scheme under Jan Suraksha Yojana, we will look to enter it at some point in time. However, we believe that at Rs 12 premium per annum, it is not adequately priced.
Q. Do you see a price correction in the group health segment?A. We have been at an advantage because we primarily play in the retail health insurance segment. The proportion of group health in our business is very small. However, we are seeing an improvement in pricing in the corporate health space. There were early beginnings last year and the premiums in group health have seen a further improvement in FY19 as well.