SBI to finalise general insurance partner shortly

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New Delhi, May 1: Country's largest lender State Bank of India on Thursday said it would finalise its non-life insurance partner during the month.

"We have shortlisted a few names and will finalise the partner for the venture during the month," SBI Chairman O P Bhatt said.

The memorandum of understanding with the shortlisted partner would be signed in the next 3-4 months, he said, adding that following the agreement, the venture would seek regulatory approval from the Insurance Regulatory and Development Authority.

Bhatt said, "Hopefully, by the end this fiscal I think we would be able to start general insurance business." When asked about the probable partner, he said, "Wherever we see good fit we will take."

According to sources, SBI has shortlisted three partners from a list of nine. These includes Australia's IAG (Insurance Australia Group) besides one from Germany and the other from the US. The general insurance venture is expected to focus initially on SBI's corporate clients.

The prospective JV partner is expected to bring in non- life insurance experience in mature and emerging Markets, relevant knowledge of product development, risk management and other systems, technology.

IAG is an international general insurance group, with operations in Australia, New Zealand, the UK and Asia. The foreign partner can pick up stake up to 26 per cent as per the current insurance regulations.

At present, there are 18 general insurance players in the country along with about four specialists in agriculture, health and credit insurance.

More entrants like Australia's QBE along with the Rajan Raheja group, among others, are awaiting approval from the insurance regulator.