SBI Life « Archives of Policy Mantra Blog

Tag Archives: SBI Life

SBI, Reliance Witnessed Steep Fall In Life Insurance Premium

Posted on May 2, 2013 by Akanksha

The life insurance industry witnessed a drop of 6% in premium collection during the financial year 2012-13, with large private sector life insurers like SBI Life and Reliance Life recording a steep fall in premium income.

The total premium collection by 24 life insurers during FY’13 stood at Rs 1, 07,011 crores, and a decline of 6% over the same period last year.

Among the private sector life insurance companies with premium income of over Rs 1,000 crores, SBI Life’s premium collection fell by 20% to Rs 5,184 crores during FY’13. Reliance Life saw its premium income dip to Rs 1,376.58 crores during the fiscal, down by 23.92%.

Country’s largest life insurer, Life Insurance Corporation of India (LIC) reported a 6.4% drop in its premium collection to Rs 76,246 crores in FY’13 as against Rs 81,515 crores in FY’12.

Among other major private players –ICICI Prudential Life and Birla Sun Life saw premium income dropping by 5.2% and 4.6%, respectively.

However, HDFC Life and Bajaj Allianz Life bucked the industry trend registering a growth of 15.7% and 10.2%, respectively.

ICICI Prudential collected a premium of Rs 4,809 crores, followed by HDFC Life at Rs 4,435 crores and Bajaj Allianz Life at Rs 2,292 crores, during financial year 2012-13.

Another private sector life insurer, Max Life, saw a meager 0.4% drop in premium income at Rs 1,899 crores.

Private sector life insurers together netted Rs 30,765 crores in FY’13 as against Rs 32,718 crores in FY’12, a decline of 6.3%.

LIC Selected as Default NPS Annuity Service Provider

Posted on March 4, 2013 by Akanksha

No Comments

Pension Fund Regulatory and Development Authority (PFRDA) has chosen state-owned Life Insurance Corporation of India (LIC) as default annuity service provider for subscribers exiting from New Pension System (NPS) and seeking withdrawal of accumulated pension wealth. It will be applicable for all variants of NPS.

PFRDA has empanelled seven Annuity Service Providers (ASPs) for providing annuity services to NPS subscribers.

While subscribers are required to select an empanelled ASP along with an annuity scheme from those offered by the chosen ASP at the time of exiting from NPS, PFRDA has now decided to assist subscribers by providing a default option.

The default scheme offers annuity – a policy by an insurer designed to provide payments to the holder at specified intervals- for life with a provision of 100% of the annuity payable to spouse during her-his life on death of annuitant.

Besides LIC, other ASPs include SBI Life, ICICI Prudential Life, Bajaj Allianz Life, Star Union Dai-Ichi Life and Reliance Life.

Under the provisions of NPS, a maximum of 60% of corpus accumulated at the time of exit, which is normally on the attainment of 60 years of age, can be withdrawn but a minimum 40% of corpus has to be utilized for purchasing an annuity from one of the empanelled ASPs.

The NPS was introduced for the new recruits who joined government service on or after first January 2004. From May 2009, the NPS was opened up for all citizens in India to join on a voluntary basis.

At the end of 2012, over 42 lakh subscriptions were enrolled with a corpus of over Rs 26,000 crores.

Categories: News | Tags: Annuity Service Providers, APS, Bajaj Allianz Life, ICICI Prudential Life, LIC, New Pension System, NPS, Pension Fund Regulatory and Development Authority, PFRDA, Reliance Life, SBI Life, Star Union Dai-ichi Life, Subscriptions

Haryana Govt. Blacklisted SBI Life for Delaying Annuity Payments

Posted on January 30, 2013 by Akanksha

No Comments

SBI Life insurance company has been blacklisted by Haryana government for allegedly delaying the process of distribution of annuity to land owners under the Resettlement and Rehabilitation (R&R) policy of the state government.

State government also said that stringent actions, including debarring SBI Life insurance from doing any further business with the state or any of its department could also be taken as per the law.

The Expression of Interest (EOI) was issued in February, 2011, inviting bids from insurance companies or banks for purposes of providing services for disbursements of annuity to the land owners under R&R policy of the state government.

The bid cum tender document was submitted by SBI Life on 31 March 2011. After that several rounds of negotiations and discussions were held with respect to various stipulations and conditions stated in the draft Service Level Agreement (SLA) including the obligation of the noticee as service provider with respect to collection and validation of data of the beneficiaries.

The decisions regarding the contract were taken by the state government on 25 July 2011, and 11 August 2011, for making payment of annuity under R&R policy by allocation of work amongst the selected insurance companies.

A Letter of Intent (LOI) was issued to noticee on 6 September 2011. The said LOI was also issued on specific and unambiguous stipulation that the LOI would be subject to execution of SLA.

It was communicated to the noticee that the government reserved its right to withdraw the said LOI in the event of failure of notice to execute the SLA.

As per the LOI, state government made advance payment towards 50% purchase consideration and allocated area of operation to the noticee.

State government said that the noticee accepted the said advance payment knowing fully well that the state government has rejected its repeated request for the change in the fundamentals of the EOI that is collection and validation of the data.

So far, the government was concerned, the issue related to data was resolved, and the noticee had accepted the said condition of collection and validation of data, said state government.

State government also said that in furtherance of agreed and accepted condition of LOI, the government vide its letter dated 4^th January 2012, forwarded the SLA duly approved by it and called upon the noticee to sign the same with its concerned departments.

However, despite repeated reminders, including ones dated 27th January 2012, and 3rd February 2012, for execution of SLA, SBI Life failed to execute the same again for the same frivolous reasons of non-deletion of clause relating to the collection and validation of data.

Categories: News | Tags: Annuity, SBI Life

Row over Mandatory Life Cover for Kisan Credit Cardholders

Posted on December 18, 2012 by Akanksha

No Comments

A controversy has risen after Chhattisgarh Gramin bank began forcing farmers to compulsorily get an insurance cover from SBI Life insurance as a condition for availing benefit of its loan instruments, including the Kisan Credit cards.

SBI Life insurance is a joint venture between State Bank of India and BNP Paribas Cardiff.

The issue came into light after Chhattisgarh Gramin Bank’s General Manager (operations) issued a circular to all its regional managers, head of the departments and all branch managers to ensure that all Kisan Credit cards (KCC) holders are covered under SBI Life’s insurance policy. The circular said that such an insurance cover would not only ensure security for loan provided but, would also help to increase Bank’s revenue.

Gramin Bank wants farmers to be covered under SBI Life’s ‘Swadhan Group’, a non-participating group term insurance plan with return of premium. It is a simple and easy solution which offers dual benefits of life cover protection in event of death and refund of premium in case of survival up to the end of the cover term.

Every farmer has to shell out approximately Rs 2,000 per year for loan of Rs 1 lakh, even if it is against his wish.

The circular came after Bank found that only 3,383 Kisan Credit card holders, out of 16,103 till 30 September 2012 were covered under the insurance scheme.

Protesting against Gramin Bank forcing farmers to buy insurance policy from a particular insurance company, Central Herbal Agro Marketing Federation of India wrote a letter to Banking division of the centre, Insurance Regulatory and Development Authority (IRDA), National bank for agriculture and rural development (NABARD) and SBI Chairman, alleging that the bank was trying to make profits out of the farmers.

In its letter federation said that, while the government is trying to provide monetary help in form of soft loan at the lowest rate of interest to the poor farmer’s bankers have linked the lending function with compulsory insurance scheme in order to make profit out of the farmers. Federation also said that very purpose of providing soft loan to the farmers was being defeated with bank forcing farmers to buy an insurance product, making it binding on them for availing farm loans, including Kisan Credit cards.

Categories: News | Tags: IRDA, Kisan Credit Card, NABARD, SBI Life, SBI Life Swadhan Group

SBI Life Launched ‘Smart Income Protect’

Posted on December 6, 2012 by Akanksha

No Comments

Private life insurer, SBI Life insurance company has launched a guaranteed traditional savings plan -Smart Income Protect.

The plan offers tax-free regular income at the guaranteed rate of 11% of sum assured or paid sum assured for next 15 years, after maturity.

The plan is catered to risk-averse investors who are comfortable with no-risk savings products that offer guaranteed returns. The plan caters to future needs such as post-retirement or child’s future expenses through its attractive feature of guaranteed annual payouts.

The plan not only offers lump sum benefit at maturity but it also offers guaranteed annual payouts for 15 years, after the maturity.

The lump sum bonus, at maturity, comprises vested reversionary bonuses and terminal bonus, if any.

In the event of policyholder’s death, the sum assured is immediately payable to the policyholder’s nominee or legal heir as a lump sum, along with the bonuses.

Categories: News | Tags: SBI Life, Smart Income Protect

Private Life Insurers Witnessed Fall in Premium Collection by Individual Agents

Posted on November 15, 2012 by Akanksha

No Comments

Private life insurance companies have witnessed a fall of 13.7% in first half of financial year 2012-13 in new business premium mainly on account of sharp decline in premium collection from individual agents.

An analysis of five large private life insurers has revealed that they collectively witnessed sharp decline in new business premium collection by individual agents in the April-September 2012 period. Premium collection by these life insurers from individual agents for April-September 2012 stood at Rs 1,763.47 crores as against Rs 2,229.28 crores in corresponding period last year, a fall of 21%.

As a proportion of total premium collection, individual agents managed 41.4% in April-September 2012 period compared with 45.9% in the same period last year.

The life insurers that were considered for this analysis are ICICI Prudential Life, HDFC Standard Life, SBI Life, Bajaj Allianz Life and Reliance Life.

Premium collection by corporate agents has also come down. Premium collection by corporate agents for April-September 2012 period stood at Rs 2,008.68 crores as against Rs 2,219.99 crores in the same period previous year, a decline of 9.5%. However, as a proportion of total premium collection, corporate agents witnessed a growth from 45.7% in April-September 2011 period to 47.2% in April-September 2012 period.

As the industry has shown overall negative growth, distribution channels like individual and corporate agents, has been significantly impacted. Banks and brokers have performed reasonably well.

Reliance Life witnessed the steepest fall of 31.5% in premium collection by individual agents. Reliance Life’s premium collection by individual agents for April-September 2012 stood at Rs 262.77 crores as against Rs 383.48 crores in corresponding period last year.

SBI Life’s premium collection by individual agents for April-September 2012 stood at Rs 459 crores compared with Rs 658 crores in the same period last year, a decline of 30.2%.

Bajaj Allianz Life was the only insurer to witness a growth in premium collection by individual agents. Its premium collection by individual agents for April-September 2012 stood at 395 crores as against Rs 380 crores in corresponding period last year, a growth of 4%.

Premium collection of Bajaj Allianz Life by corporate agents for April-September 2012 stood at Rs 113 crores compared with Rs 248 crores in the same period last year, decline of 54.4%.

Premium collection of SBI Life by corporate agents for April-September 2012 stood at Rs 317 crores compared with Rs 626 crores in corresponding period last year, a decline of 49.4%.

However, ICICI Prudential Life saw a rise in premium collection by corporate agents. Its premium collection by corporate agents for April-September 2012 stood at Rs 656 crores as against Rs 435.2 crores, a growth of 50.7%.

During April-September 2012, HDFC Standard Life’s premium collection by corporate agents stood at Rs 834 crores as against Rs 808 crores, a growth of 3.2%.

Premium collected by brokers, who are allowed to sell policies of multiple insurers, grew by 6.1%. However, their contribution to total premium remained as low as 6%.

Categories: News | Tags: Bajaj Allianz Life Insurance, Corporate Agents, HDFC Standard Life, ICICI Prudential, Individual Agents, New Business Premium, Private Life Insurers, Reliance Life, SBI Life

Life Insurers Witnessed 10.7% Drop in Renewal Premium During April-September 2012

Posted on November 8, 2012 by Akanksha

No Comments

Four large life insurers have witnessed a drop of 10.7% in renewal premium collection during April-September 2012 at Rs 10,512 crores as against Rs 11,767 crores in corresponding period last year.

However, these life insurers witnessed a marginal growth of 1% in new business premium collection during April-September 2012 at Rs 6,624 crores as against Rs 6,553 crores in the same period last year.

The total premium collection for these insurers for April-September 2012 stood at Rs 17,136 crores as against Rs 18,320 crores in corresponding period last year. Renewal premium formed 61.3% of the total premium collection during April-September 2012 compared with 64.2% in the same period last year.

The insurers that were considered for this analysis are ICICI Prudential Life, HDFC Standard Life, SBI Life and Bajaj Allianz Life.

Only insurer that registered growth in renewal premium is HDFC Standard Life. During April-September 2012 renewal premium of HDFC Standard Life stood at Rs 2,805 crores as against Rs 2,690 crores in corresponding period previous year, a growth of 4.3%.

During April-September 2012, renewal premium collection of Bajaj Allianz Life stood at Rs 1,669 crores as against Rs 2,124 crores in the same period last year, a decline of 21.5%.

For SBI Life renewal premium collection for April-September 2012 stood at Rs 2,185 crores compared with Rs 2,593 crores in corresponding period last year, a decline of 15.7%.

Renewal premium collection of ICICI Prudential Life for April-September 2012 stood at Rs 3,853 crores as against Rs 4,360 crores in corresponding period last year, a negative growth of 11.6%.

Categories: News | Tags: Bajaj Allianz Life, HDFC Standard Life, ICICI Prudential Life, Life Insurers, SBI Life

SBI Life to Launch Host of New Products Soon

Posted on October 17, 2012 by Akanksha

No Comments

SBI Life Insurance will soon launch four new insurance plans across savings, protection and pension platforms.

These plans include a family income protection plan, a monthly income savings plan, a traditional pension plan and a market linked plan (ULIP). These plans will be targeted at younger audience.

These plans will be available across SBI Life’s multi distribution channel including bancassurance through State Bank of India (SBI) branches, retail agency and institutional alliances.

During last financial year, company introduced several new plans that include Health Insurance – Cash, Variable Insurance— Flexismart, Traditional Savings – Smart Money Back and Immediate Annuity – Annuity Plus.

The company also launched first-of-its kind multi-lingual website across Indian financial sector.

During current financial year, company has added 39 new branches. It has also recruited 14,000 insurance advisors and 2,000 certified insurance facilitators.

Categories: News | Tags: SBI Life, ULIP

Corporate Insurance Agent’s Commission Income Increased by 13% in Q1

Posted on August 28, 2012 by Smita

No Comments

During first quarter April-June 2012, corporate agents have witnessed increase of 13% in their commission income while, individual agents and brokers have witnessed a slight fall. Consequently, portion of commission earned by corporate agents has also gone up to 47% out of total commissions paid in first quarter of 2012-13 as against 42% in corresponding period last year.

These are the findings of an analysis of eight large life insurers. Eight life insurers that were considered for the analysis are SBI Life, HDFC Standard Life, Max Life, ICICI Prudential Life, Birla Sun Life, Reliance Life, MetLife and Aviva Life.

Total commissions disbursed by these eight life insurers during April-June 2012 increased marginally by 1% to Rs 539 crores as against Rs 533 crores in corresponding period last year.

Total commission paid to corporate agents during April-June 2012 stood at Rs 253 crores as against Rs 224 crores in corresponding period previous year.

Generally, life insurance companies depend on corporate agents (including bank partners), insurance brokers and individual agents for distribution of their products. Individual agents and corporate agents are allowed to sell insurance policies of one life and one non-life insurance company, while there is no such restriction on insurance brokers.

During first quarter of FY’13 individual agents earned commission income of Rs 255 crores as against Rs 271 crores in first quarter of FY’12, a drop of 5.6%.

During April-June 2012, insurance brokers earned commission income of Rs 35.6 crores as against Rs 38.4 crores in April-June 2011, a drop of 7.3%.

Corporate agents have seen an increase in their commission income as corporate agency channel has expanded over last few quarters; it has increased its presence in Tier II and Tier III cities. Also, corporate agents generally focus on traditional insurance products where commission rates are higher as compared to Unit-Linked Insurance Plan (ULIPs).

MetLife has seen a steep rise of 158% in commission disbursements to corporate agents. During first quarter of FY’13 MetLife paid Rs 15.75 crores to corporate agents as commission as against 6.1 crores in first quarter of FY’12.

ICICI Prudential Life disbursed Rs 61 crores to corporate agents as commission during April-June 2012 as against Rs 34 crores in corresponding period last year, a rise of 80%.

However, during first quarter of FY’13 commission income for corporate agents of Aviva Life decreased by 33% to Rs 5 crores as against 7.5 crores in first quarter of FY’12.

The commission income of individual agents of HDFC Standard Life increased by 70%, during April-June 2012, to Rs 30 crores as against Rs 17.7 crores during April-June 2011.

Categories: News | Tags: Aviva Life, Birla Sun Life, Corporate Insurance, HDFC Standard Life, ICICI Prudential Life, Max Life, Metlife, Reliance Life, SBI Life, ULIP, Unit Linked Insurance Plan

Operational Efficiency Driving Life Insurer’s Profitability

Posted on May 3, 2012 by Akanksha

No Comments

Despite negative growth of life insurance industry in FY’12, life insurers are posting higher profits than last fiscal. This profitability is driven on the back of operational efficiency.

SBI Life Insurance, which has become the largest private sector insurer in terms of new business premium, has posted a net profit of Rs 556 crore in FY’12 which is the rise of 52% on year-on-year basis. ICICI Prudential life insurance has reported increase of 71% in net profit at Rs 1,384 crore in FY’12 as against Rs 808 crore in FY’11. HDFC Life insurance has also reported maiden profit of Rs 271 crore in FY’12.

As per insurers, the back book has started generating sufficient profits to offset the new business strain incurred on writing new policies. They also cited that their consistent focus on cost monitoring and containment and focused efforts on conservation ratio, have helped them in reducing the operating expense ratio over the years.

These are statutory profits as per Indian accounting standards and insurers still have accumulated losses. As of 31 March 2011 the cumulative losses of life insurers stood at Rs 20,569 crore as against Rs 20,143 crore in FY’10.

Life insurance is a capital intensive business and insurers are required to infuse capital at regular intervals to fund both the new business strain and to expand their infrastructure base including expenses on initial operations, training costs for the development of the distribution channels, creating niche markets, achieve reasonable levels of persistency.

A life insurance company takes seven to ten years to break even.

During 2011-12 life insurance industry registered negative growth of 9.21%. For FY’12 industry’s first-year premium collection stood at Rs 1, 14,232.72 crore as against Rs 1, 25,826.03 crore in FY’11.

In FY’11 life insurance industry reported net profit of Rs 2,657 crore as against the net loss of Rs 989 crore in FY’10. Besides Life Insurance Corporation of India (LIC), 11 private companies reported profit in FY’11. They include ICICI Prudential, Bajaj Allianz, Birla Sun Life, Max New York Life, SBI Life, Kotak Mahindra Life, TATA AIG Life, MetLife, Aviva Life, Sahara India Life and Shriram Life.

Categories: News | Tags: New Business Premium, SBI Life

Health Insurance Plans