Q. The financial global turmoil had some impact on most sectors in India. According to you, how badly was the Indian Insurance industry impacted and which are your key business areas that have witnessed a slowdown?

A. Despite the recent economic slowdown SBI Life Insurance has shown robust year-on-year growth, primarily due to the trust and transparency of the SBI brand, customer centric approach and capital efficient multi-distribution model.

While the Life Insurance Industry recorded a -6.32% growth and private players recorded a growth of 1.03% during the FY08-09, SBI Life grew New Business Premium by 12.39% during the FY 08-09. The New Business Annualized Premium Equivalent (APE), a standard measure in the industry grew by 33% to Rs 4,896 crores. The Gross Written Premium (GWP) of the company grew by 28% to Rs 7,212 crores.SBI Life also increased its market share significantly to 6.18% in the life insurance industry and to 15.77% among private players and moved to the No 2 position among private players. Assets Under Management grew by 43% to Rs 14,544 crs in FY 08-09.SBI Life continues to maintain a lead among private players in no of lives covered, having covered over 13 mn lives.

Q. Insurance in India is a big opportunity especially with the large population and untapped potential. What according to you are going to be the key growth areas in the near future? Any measures taken by you to ensure vast growth in these segments? Also, what about your efforts in rural India?

A. Despite the increasing number of insurance players a huge part of the Indian population still remains underinsured. People still look at insurance as a tax saving instrument. There is an urgent need to create awareness on insurance and educate people on the need for insurance.While players are at different stages of development and market presence, their strategies and business models are largely “one-size fits all” low margin single premium policies and ULIPs. These have mainly driven premium growth and the distribution models are still fairly undifferentiated. We need differentiated strategies for core market segments, distribution excellence, operational efficiency and capturing the untapped demand in health and pensions.

As against the minimum 18%, we have achieved a percentage of 27.17% in the rural sector. SBI Life has the most robust and widespread network of the State Bank Group branches through which it reaches out to the customers in the remotest parts of the country. In FY 08 SBI Life launched its micro insurance product Grameen Shakti for the economically underprivileged section of rural India covering 5,60,704 lives. This project has been rolled out in phases through State Bank Brach network in Orissa, West Bengal and Tamil Nadu and North East.

Q. In the early years insurance companies face huge cost over runs. How is your company placed with regards to this aspect? What are the other challenges faced by the insurance industry?

A. SBI Life has a unique multi-distribution model comprising of bancassurance, agency and corporate solutions which has made it the first new age life insurance company to break even and register profit for three consecutive years. SBI Life follows the integrated bancassurance model where the cost of operations is significantly lower than any other distribution channel, barring the online direct selling channel, because bank employees themselves sell the life insurance product to the bank’s customers. Thus, commission payable on the sale is paid only to the bank who in turn internally incentivize the authorised employees that sell life insurance products. Using the network of the State Bank Group (SBG), SBI Life has successfully been able to reach out to the remotest parts of the country in a cost-effective manner, particularly since the bank’s staff - Certified Insurance Facilitators (CIFs) - who deal with the banking needs of our customers also sell the life insurance products.

In addition SBI Life’s agency force has the advantage of the backing of the State Bank Brand which makes them more acceptable than other insurance advisors.

Q. Higher business growth requires high level of solvency margin and capital infusion on a regular basis is necessary. What are the ways considered by you to inject additional capital? Are there alternatives that you suggest the industry should move towards?

A. With a paid-up capital of Rs 100 crore, the company is adequately capitalised with a solvency ratio of over 2.5. We don’t also have to fund accumulated losses. Keeping the economic environment in mind, we expect not to need funding in the first half of 2009-10. We will however continue to review the solvency margin and infuse capital when needed.

Q. In recent times, the private sector has proved vital in facilitating the sector’s growth. What are the measures taken by you to exhibit strong growth amidst the fierce competition?

A. Despite the recent economic slowdown SBI Life Insurance has shown year-on-year growth. This is primarily due to the trust and transparency of the SBI brand, customer centric approach and capital efficient multi distribution model.

Q. What is your product USP/ strategy that sets apart your company from the rest?

A. When it comes to products we believe in offering simple, economical and need-based life insurance solutions to our customers. This strategy is reflected in all the products that we have launched so far. In FY 08-09 in view of the economic downturn and realising the need for a Guaranteed product we launched SMART ULIP, a NAV guaranteed product. We also recently launched Maha Anand that offers an opportunity to larger sections of society to participate in the equity markets and benefit by systematically investing over a long term horizon. With the SBI brand behind these products, we have seem working wonders in the market.

Q. Growth in the Insurance Industry is largely dependant on product innovation backed by a strong distribution network. How well is your company equipped with this kind of work force/ infrastructure? Do you see some major hiring in the near future (6 months)? What are your expansion plans in terms of number of branches?;

A. SBI Life has a unique Multi – Distribution Business Model comprising of Bancassurance, Agency and Corporate Solutions. This enables us to cater to the needs of diversified customer segments in a very cost effective manner. Bancassurance network: As pioneers in bancassurance distribution, we have today one of the most robust and widespread network of bank branches selling life insurance products through its own employees. Today we sell our products through over 16,000 State Bank Group branches. In FY 08-09 Bancassurance Channel contributed to 28% to the New Business Premium.

Retail Agency: In addition to having a strong bancassurance network, SBI Life also has a highly productive and committed Insurance Advisor (IA) base of nearly 70,000. In FY 08-09 the Agency channel has contributed over 30% to the New Business Premium of the company. SBI Life has also achieved the rare distinction of being among the top life insurers globally in terms of number of MDRT qualifiers.

Corporate Solutions: In FY 08-09, the erst-while Group Corporate Channel (now renamed Corporate Solutions in its new role) contributed significantly to the growth in New Business over the past two FYs. It has leveraged to a large extent, the corporate connections of the State Bank group.

Q. How well has your company tapped the bancassurance channel of distribution? Are there other new avenues (like online retail of insurance) that you would like to tap in order to enhance your marketing and distribution network?

A. SBI Life follows the integrated bancassurance model described earlier. As pioneers in bancassurance distribution in the Indian insurance sector we have today the most robust and wide spread network of bank branches selling life insurance products through its own employees.

Our USP is the flagship brand of State Bank of India. Using the network of the State Bank Group (SBG), SBI Life has successfully been able to reach the remotest corners of the country in a cost-effective manner, particularly since the Bank’s staff - Certified Insurance Facilitators (CIFs) - who deal with the banking needs of our customers also sell the life insurance products.

SBI Life’s unique multi-distribution model has made it the first new age life insurance company to break even and register profit for three consecutive years. In FY 08-09 despite the prevailing slowdown, we outpaced life insurance industry’s growth rate, with our insurance operations continuing to be profitable.

We are always innovating in our distribution efforts and on-line retailing is an important option.

Q. What are your future plans? How do you perceive the Insurance industry to shape up in the next two years?

A. We expect that by 2012 the life insurance industry in India could witness a rise in the insurance sector premiums to between 5.1 to 6.2 % of the GDP from the current 4.1 %. We see a potential for the Life Insurance industry to grow strongly in volume, fulfill its economic and social role and generate attractive profits. For all large players faced with a rapidly intensifying competition, along with an evolving consumer base India’s life insurance players need to develop bold, new approaches in several key areas that include differentiated strategies for core market segments, distribution excellence, operational efficiency and capturing the untapped demand in health insurance and pensions. Over the next two years, SBI Life aims to firmly establish itself as the “Most –Preferred” life insurance company in the country with New Business premium crossing the Rs 10,000 crore mark.