New Delhi, Jan. 23: SBI Life Insurance is preparing to piggyback on its parent’s huge network of almost 9,000 bank branches to hawk its insurance policies next fiscal.
SBI Life, which is late entrant in this sector, is harnessing all its natural advantage to emerge as a formidable rival to private insurance companies
SBI Life, a 74:26 per cent joint venture between State Bank of India and Cardif Life of France, will be able to access the captive client base of almost 10 crore people who bank with SBI. The insurer plans to sell its policies by taking advantage of the Bancassurance concept. Besides using its 1,500 agents, the bank may also try sell its policies through all its associate bank branches.
SBI Life’s chief marketing officer S. Murlidharan told The Telegraph, “For any insurance company to do well, it is very necessary that the insurer has a reliable name in the market and accessibility to the people. In our case we have both, so undoubtedly we will do well.”
”We have planned to run the exercise in three phases. The bank operates in 14 circles across India. We have chosen 25 branches in each circle to sell the policies,” he added.
Murlidharan said: “The bank branches will act as a corporate agent to SBI Life for product dispensation. We have already started selling policies from earlier this month. But a lot of our bank people are still undergoing training (a 100-hour mandatory training set by the IRDA).”
There are several advantages of selling insurance policies through bank branches. There is not only a collective client database available to the insurer, but it is also easier for them to sell insurance to people who have faith in the bank.
It is easier to sell simpler products like whole-life policies, money back policies and endowment products through banks. Murlidharan said, “The insurer is likely to achieve faster growth through bancassurance as a distribution channel.”
He added: “The insurance company also gets the opportunity to utilise existing infrastructure at a lower administrative expense. Most importantly, banks acting like additional channel will facilitate customers to purchase products according to their convenience.”
Responding to a query on how competitors see the growth of SBI Life in a few years, a senior official from ING Vysya Life said, “Among the new players, SBI Life is likely to grow very fast. It has huge potential and is backed with a lot of trust, which makes the market easily accept its products.”
SBI Life Insurance, which started its operations in October 2001, has earned a premium of Rs 75 crore covering almost 3,17,000 lives.
Although the company has not set a specific target, Murlidharan said, “This year we hope to earn at least two-thirds of our premium through the Bancassurance channel and the remaining one-third through our normal distribution channels.”