Revamped Discussion with SBI General Insurance CEO Naveen Chandra Jha on FY26 Strategy
"Naveen Chandra Jha articulates retail health as a primary emphasis for their plans"
SBI General Insurance, with a staggering net profit of Rs 509 crore in FY25, intends to keep the growth going strong in FY26. In a lively chat with Narayanan V, the big boss himself, Naveen Chandra Jha, shared some exciting growth plans and focus areas. Let's dive in!
The 11% increase in Gross direct premium in FY25, seemed like a slowdown?
Whoa, mate, nothing like that! The slower growth was largely due to the new '1/n' accounting norms, which affected the general insurance industry as a whole. Despite the impression that only 7% growth was witnessed, our Gross written premium surged an impressive 11.1% year-on-year to reach ₹14,140 crore. That's approximately 1.7 times more than the industry average and double the growth of private multi-line insurers. We even managed to clock a solid bottom line performance, nearly doubling our net profit to ₹509 crore in FY25. We nabbed a bigger piece of the market share in motor, health, and personal accident segments. Even with industry-wide headwinds such as new accounting norms, fire segment premium rate cuts, and slowed motor sales, we're pretty satisfied with our performance. We aim to maintain this growth ride in FY26.
The merger of state-run general insurers is back on the table, any thoughts on that?
Well, it's tough to say. With muted motor vehicle sales expected this year, we need a solid strategy. Though the motor segment growth isn't as strong as FY23, we've got plenty of room to grow with our 4.5% market share. Even if new car sales are sluggish, the used-vehicle market is massive and ripe for the picking. Thus, our concentration is on renewals. We're tiny fish in the two-wheeler segment at the moment, but we've pieced together a strategy to dominate the scene. We're gonna be in the red for a couple of years since we pay the full commission upfront, but we'll only account for a fifth or sixth of the premium due to the '1/n' norms. Buckle up, though, because we're all about creating a killer presence in the two-wheeler market. In addition, our agency channel will heavily swoop in on the used-car segment. So, even if the overall motor growth remains modest, we believe we can still grow powerfully, just like last year.
What's your planned product mix for FY26?
Motor remains our star performer, but this year, we're all in for engineering, retail health, and fire. Motor pocketed 33% of our gross direct premium income (₹13,890 crore) in FY25, followed by health with 25%. We're aiming for a balanced mix, with motor taking up 30%, health 25%, personal accident 10%, crop 15-16%, and corporate 15%.
What are your primary focus areas for the coming fiscal year?
Retail Health Insurance, here's the scoop! Our health portfolio soared by 19% last year, blowing away the 16% industry average. We're squarely focused on retail health, but let's not compete where the big boys do. We're hunting for fresh, untapped markets. Since our brand is so trusted in the countryside, we're planning to open standalone SBI General branches in tier III and IV cities to expand our reach in these underserved regions. Last year, we recruited around 1,000 health champions, with 400 of them through the government's skill development program. Their primary goal? Chasing the retail health insurance dollar.
How do we make our retail health business thrive?
We're going to max out our advantage using SBI's vast network of over 22,000 branches. We're also refining our product offerings to fit all customer segments. We're also going to launch exclusive retail health branches staffed by two people. On top of that, our agency channel will tighten its focus on retail health. With our market share in health insurance hovering at a mere 2.5%, there's still plenty of headroom for growth.
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While the specifics of SBI General Insurance's FY26 strategy are still under wraps, here's some insight on common strategies for insurance companies:
- Retail Health Insurance: Affordable plans, digital platforms for smooth policy purchases and claims, and tailored offerings for different customer segments
- Used-Vehicle Insurance: Competitive pricing, flexible policies to accommodate used vehicle owners' needs, and digital sales platforms to streamline operations
- Tier III & IV Expansion: Streamlined agents' network, local partnerships, and products customized for these regions
- Technology Integration: Digital transformations, data-driven decision-making, and innovative distribution channels for growth and cost reduction
- Despite the 11% increase in Gross direct premium in FY25 being considered a slowdown due to new accounting norms, SBI General Insurance's Gross written premium surged an impressive 11.1% year-on-year, double the growth of private multi-line insurers.
- In the coming fiscal year, SBI General Insurance plans to focus on retail health insurance, aiming for a balanced product mix with motor, health, personal accident, crop, and corporate segments, emphasizing an expansion in retail health insurance in underserved tier III and IV cities.
- The insurance company also intends to enhance its digital presence and streamline its agents' network for expansion in used-vehicle insurance and tier III & IV cities, offering competitive pricing, flexible policies, and tailored offerings to accommodate customers' needs.
- SBI General Insurance will leverage its vast network of over 22,000 branches for retail health insurance growth, refine product offerings for different customer segments, open exclusive retail health branches, and tighten its focus on retail health through its agency channel to capture untapped markets.
- Insurance companies, including SBI General Insurance, are expected to deploy strategies such as affordable Retail Health Insurance plans, digital platforms for a smooth policy purchase and claims process, and tailored offerings for various customer segments to drive growth and stay competitive in the market.
