After recording its fastest growth in the first nine months of the current financial year, SBI Life Insurance is planning to infuse additional capital by February – March. The life insurance subsidiary of State Bank of India, part owned by Cardiff, a BNP Paribas company reported 101 per cent growth in total premium for the first nine months ended December 07. To support the business growth in the last quarter, which is the best quarter for insurance companies SBI Life plans to infuse Rs 300 crore to Rs 400 crore additional capital. “Grwoth picked up considerably in the last quarter after having been subdued till September,” said U.S.Roy, MD&CEO of SBI Life Insurance.
Asked about the issue of capital infusion as the holding company structure proposed by the parent State Bank of India pending with the Reserve Bank of India Roy said, “if we don’t hear from RBI within a month or so, we would take an independent decision.” He said the valuation process is on and an initial public offer of shares would also be considered to raise capital. Assets under management as on December 2007 stands at Rs 7300 crore and the paid up capital is Rs 600 crore. SBI owns 74 per cent of the capital and the remaining 26 per cent with Cardiff.
SBI Life, which ranks the 3rd among the private life insurers in India was the first to report profits and in the last quarter it has wiped out accumulated losses. For the quarter ended December 07 it has posted net profit of Rs 37.74 crore. “Our capital-efficient model has helped us to wipe out accumulated losses from our balance sheet,” Roy said. While agency channel contributed 49 per cent of its business, 44 per cent came through the bancassurance channel, insurance products sold through the 14,500 plus SBI branches.