16-09-2020
SBI General will not buy Future Generali
Insurance AlertssSBI General will not buy Future Generali
Mumbai: SBI General Insurance has dismissed reports that it is looking at acquiring Future Generali and said it hasn’t had any discussions with the private insurer and is focused on organic growth. According to SBI General Insurance MD & CEO P C Kandpal, the company’s current growth rate will get it a market share of 10% among private companies and a valuation of over Rs 50,000 crore in a few years.
Speaking to TOI, Kandpal said SBI General has managed to grow 20% despite the lockdown. The company has generated new business premium of Rs 2,607 crore in August as against Rs 2,187 crore a year ago. The highest growth has been in health and fire cover segments. The rise this year has come on the back of a 45% growth last year. On Monday, SBI General also signed a bancassurance agreement with Yes Bank.
“Expanding business for SBI group, which is present across the length and breadth of the country, is not a problem. We know how to increase reach and distribution in one go. We have access to 22,000 branches, 40,000-50,000 business correspondents, which provide us access to 5 lakh villages,” said Kandpal.
He added that although a number of small private companies were on the block because of reversal in the GDP, SBI General was not interested in acquisition because it would raise cultural issues. While listing of the company was a medium-term strategy, SBI General would not go public until it can get a valuation of Rs 50,000 crore, which could take a few years, said Kandpal.
“We want to work on value creation for the customer and without a cultural fit, there is no value creation. We do not want to lose the trust generated by SBI brand,” he said. Kandpal said that in future, the three-pronged strategy would be to tap rural India or Bharat, innovation in products, and the use of a combination of assisted digital to reach out to customers.
The next big growth opportunity, according to Kandpal, is in the health segment providing cover to the ‘missing middle’ where the government was focused on. This refers to the millions who are not covered under the social welfare schemes or private health insurance schemes. The government plans to address this by giving insurance companies responsibilities for specific states.
Source: The Times of India
