Chennai: With single premium policies contributing sizeable amount of business SBI Life Insurance Company Limited has decided to broad base its business portfolio by tripling its agency force, strengthening the traditional as well as unit-linked life insurance policy (ULIP) portfolio, says Pier paolo Dipaolo, 49, deputy CEO, SBI Life Insurance Company Limited.

Dipaolo an Italian by birth, has a degree in industrial chemistry and an MBA specialising in strategic marketing. He started his career with a FMCG company and then moved into banking. Three years later he joined Cardif, and was instrumental in setting up the company in Italy.

For 10 years he was Cardif''s managing director in Italy before moving to France to participate in the company''s overseas ventures, including the Indian operations. Two years ago he joined SBI Life, a 74:26 joint venture between State Bank of India and Cardif.

When asked to compare and contrast the life insurance business in France and that in India, he says, "The differences lie in complexities in operations as well as product design. In India the market is driven by individual agency force whereas in other countries it is driven by banks."

He adds, "Overseas the products sold through banks are simpler and there are separate regulations that govern the bancassurance channels. In India all the distribution channels vend the same products and are governed by one regulation."

According to Dipaolo, Indian banks still consider selling insurance policies as an extra workload and not an active revenue source for the bank. "In the West, it is a big business for banks as the customer segments are clearly divided."

SBI Life depends mainly on parent company SBI and its associate banks for selling its life insurance policies.

In a brief meeting, Dipaolo talked about SBI Life''s business derisking plans and also branch expansion network. The company plans to double its total premium income to Rs6,000 crore this year. Excerpts:

Last year the company earned a total premium of around Rs2,928 crore of which the share of new business is around Rs2,566 crore. That leaves a very small renewal premium of Rs362 crore.
We sell lot of single premium policies. Our credit protection and group corporate products are single premium polices which are sold in large numbers.

How much does your company earn from credit protection policies and what is your target for the current year?
Last fiscal the credit protection policies — home loans, car loans and others — fetched us Rs275 crore. Our idea is to double that this year.

The corporate group segment contributes 17 per cent of your total premium, which exposes you to the threat of non-renewals. Plus your credit protection products, barring the home loan policies, are of short duration. How do you plan to derisk the business?
We are not facing any problem with the renewals of corporate group policies. Our distribution partners have good relationship with their clients and hence it is not much of a worry for us.

Further our pricing is far lower than that of our competitors. However we intend to change the mix and increase our sales of regular premium policies.

How will you do that?
We are planning to increase our agency force by 45,000 to 75,000 by the end of this year. In addition we will be adding 50 more branches to our existing 120 units.

The productivity of our agents is 5 per cent higher than that our next competitor. On the products side, we will launch micro insurance products and strengthen our traditional product portfolio launching new policies.

How many branches of SBI and its associate banks sell your products? What are your plans to expand that network?
Currently around 7,000 bank branches out of 15,000 sell our products. We hope to increase the number to 12,000 by the end of this fiscal. The potential is high.

Life insurers are heavy investors in real estate. What is SBI Life''s plan here?
We have been investing in financial instruments alone as investments in real estate needs sizeable funds. Currently we are looking for our own premises to house our corporate office in Andheri, Mumbai. We want around 70,000 sq. ft office.