Leading private sector insurer SBI Life Insurance on Wednesday reported a 33% growth in net profit at Rs 366 crore for the financial year ended March 2011 on the back of increase in renewal premium income.
"We continue to be profitable from operations side as we keep our expenses low. Bancassurance (bank channels) and agency force is helping us to sustain profits," SBI Life Insurance managing director M N Rao said.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI owns 74% of the total capital in the JV and BNP Paribas Assurance holds the remaining 26%.
The total premium income of the insurance company during the fiscal grew by 28% to Rs 12,912 crore. New business premium collection stood at Rs. 7,572 crore, a rise of 7% over previous financial year.
"We are moving aggressively on renewal business. With 74% growth, our renewal premium collection rose to Rs 5,340 crore in FY'11 from Rs 3,063 crore in FY'10," Rao added.
The persistency ratio of SBI Life rose to 69% in FY'11, from 58% last year. Also the Asset Under Management jumped by 40% to Rs 40,163 crore at the end of March 31, 2011. The company added 135 branches during the fiscal.
During the current financial year (2011-12), SBI Life would focus on optimising bank channel usage for product distribution.
"We will focus on the bancassurance model. We plan to open 75 new branches by middle of June this year for which we have IRDA approval," he added.
The company is also looking at increasing the workforce by up to 15% during the current fiscal. We will increase the staff strength to about 8,250 from 7,300 at present.
On plans of capital infusion, Rao said SBI Life is a well capitalised company and all expansions would be funded by internal accruals.
"In the current fiscal we are targeting a 35% growth in total business premium from Rs 12,912 crore at present. With this we will be able to fund all the expenses," Rao added.