Date:17/11/2005 URL: http://www.thehindubusinessline.com/2005/11/17/stories/2005111702670600.htm

Back SBI Life targets Rs 200-500 cr of IMD redemption

Our Bureau

Mr S. Krishnamurthy, MD & CEO, SBI Life Insurance Co Ltd, (left) with Mr Kapil Wadhawan, MD, DHFL, at a press conference in Mumbai on Wednesday. — Paul Noronha

Mumbai , Nov. 16

SBI Life Insurance aims at tapping around Rs 200-500 crore from the redemption of Indian Millenium Deposits, due next month. It hoped to rake in this amount especially through its recently launched insurance policy "Dhana Vridhi", said Mr S. Krishnamurthy, MD and CEO, SBI Life Insurance, while speaking on the sidelines of a tie-up with Dewan Housing Finance Corporation (DHFL).

Dhana Vriddhi is a single premium plan that assures an annual guaranteed compound return of 5.75 per cent on the sum assured over a five-year duration.

SBI Life was set to cross Rs 1,000 crore in terms of premium by the end of the fiscal and the company had so far garnered Rs 305 crore in the half-year period ended September 2005, he said.

SBI Life tied up with DHFL to offer life insurance to the company's home loan borrowers. The scheme, called "Amar Chhaya", gives customers the flexibility to either pay a single premium or get it financed by DHFL, where the premium will be adjusted with EMI of the home loan.

Mr Kapil Wadhawan, MD, DHFL, said the company would not hike loan rates immediately and would review the situation by the end of the fiscal. The company's capital adequacy ratio was at 15 per cent and itplanned to raise Rs 100 crore through a convertible bond issue. It was also looking at more acquisitions in the home finance segment, Mr Wadhawan said.

SBI Life has also set a target of covering around 3-lakh home loan borrowers this year.

Mr Krishnamurthy said the company currently raked in 30-40 per cent of its premium from credit life insurance products. In fact, most of the premium towards credit life products comes via loans sold through SBI bank branches.

Taking the tie-up with DHFL a step further, SBI Life will also be working towards designing a life insurance product that covers medical exigencies of home loan customers.

Dewan Housing currently has tie-ups with Cholamandalam MS General Insurance Company to cover home loan borrowers against job loss and natural calamities.