SBI Life to hit 20 cities on June 15

So far, the maximum branches for an insurance jv in the country is eight

Sitanshu Swain

Mumbai, June 3: The post-liberalisation domestic life insurance market is expected to gain high momentum with state-owned SBI Life Insurance planning to storm twenty cities in the country with its array of life insurance products on June 15.

The entry of SBI Life Insurance, a joint venture between SBI and French based bancassurance major Cardif, will kick off a lot of heat which has been missing in the newly-opened up insurance market despite five major corporate brands — ICICI-Prudential, HDFC-Standard Life, Birla-Sun Life, Max-New York Life and OMKotak — launching their products.

The fact that the SBI is hitting twenty cities right from the day one speaks volumes about its enormous inherent capacity, said the analysts adding that so far Max New York Life, at eight cities, had touched the maximum places.

And, like Life Insurance Corporation of India (LIC), SBI has the guarantee of the government which no other new life insurance players have so far.

Going by the recent phenomena where LIC had substantial jump in its business in all parameters during 2000-2001, immediately after the market has opened up, shows the preference for the government guarantee by the prospective customers in the long-term investment.

Also SBI will be the first institution to launch the bancassurance products which are highly popular in Europe. Cardiff, which is partnering the bank in the life insurance venture, is itself a successful bancassurance entity in France.

Analysts point out that bancassurance products will be cheaper than other life insurance companies’ products giving SBI some formidable advantages, even over LIC.

Also like LIC it has vast branch network and a large chunk of existing customer base who can be given additional services in the form of insurance products.

However, the bank will not be able to make use of its vast branch network in the beginning as the existing guideline by the Insurance Regulatory and Development Authority (Irda) does not permit public sector banks to sell insurance products.

Irda is seized of the issue and an amendment to the existing Act is overdue.

SBI has already tested the market through advance launch of one of its timely single premium products, Sanjeevan, which has found a strong customer base among the recent VRS optees of the bank. It has a minimum sum assured of Rs 1 lakh.

After experiencing the interest shown by its own VRS optees the SBI Life has decided to market it for other banks.