SBI General set to break even

Calcutta, Aug. 25: SBI General Insurance, which had suffered a loss of Rs 105 crore in 2014-15, expects to break even this financial year.

Bhaskar J. Sarma, managing director and chief executive officer of SBI General Insurance, today said the company was targeting a premium collection of Rs 2,400 crore against Rs 1,600 crore last year with an increased focus on health insurance. "We are also expecting to break even this year," he added.

"We are bullish on the health insurance segment. It is a focus area of the government and the regulator (Insurance Regulatory and Development Authority) and the segment is growing at 20-25 per cent. This trend is expected to continue. With growing awareness, there is a greater interest from semi-urban and rural area. For us, we expect the segment to grow from 7 per cent (of gross premium) to 18-20 per cent," he said.

Sarma said a recovery in motor insurance was also expected in the second half of this fiscal. He said that the third-party loss ratio was getting corrected every year with a revision in premium.

Motor, fire and marine insurance constitute 79 per cent of the premium mix of SBI General Insurance.

The State Bank of India, the country's largest lender, has also initiated the process of diluting its stake from 76 per cent in the general insurance company. Insurance Australia Group (IAG), which holds 26 per cent in the venture, is looking to increase its stake to 49 per cent. The divestment decision has been in the wake of the government's move to allow foreign direct investment of up to 49 per cent in insurance, thereby allowing the promoters to unlock value.

Both the SBI and IAG have appointed firms to assess the valuation and Sarma said the reports were expected soon.

State Bank of India