SBI Life Insurance
Among the leading domestic life insurers, SBI Life's competitive edge comes from a wide reach of SBI branches, highly productive agents, a low cost ratio and a reputable SBI brand.
In India, financial inclusion lies close to the heart of the government. Since August 2014, Pradhan Mantri Jan Dhan Yojana, a national mission for financial inclusion, has aimed to provide financial services to large swathes of the population who are un-served and under-served.
This means helping to ensure that individuals and businesses have access to useful and affordable financial products and services that meet their needs. These include transactions, payments, savings, credit and insurance that are delivered in a responsible and sustainable way.
While progress has been made, there is still some way to go. Take the life insurance ownership gap, for instance. Of India's rural population, only 22% own a life insurance policy. This compares with 73% across urban areas1. The low rural rate is due to a lack of funds, high premiums and cumbersome buying processes.
Across our holdings, SBI Life Insurance has what it takes to help tackle the under-provision of insurance. It is the largest private life insurance provider domestically, with a higher presence in rural and semi-rural areas than its local peers.
SBI Life's lower average ticket size versus that of its rivals also underscores its affordable premiums. This would help increase insurance access to those who would otherwise go without life protection.
The company focuses on expanding its services to underpenetrated areas. It has good support from a reputable brand. It also has a productive agency force and an extensive bancassurance distribution network.
This focus sits well with the United Nations' Sustainable Development Goal 8.10 - to strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.
Backed by a solid balance sheet and low-cost base, SBI Life is well placed to capitalise on its entrenched and broad network to tap the massive under-serviced insurance market.
Aside from aiding financial inclusion, this also offers the insurer significant scope for growth. This is given its diversified products and rising share of higher-margin protection business.
Its longer-term prospects are promising, when taking into account the growing middle class, young insurable population and growing awareness of the need for protection and insurance planning in India.
1 Around a fifth of rural population owns life insurance products vs 73% in urban India: Survey | Mint (livemint.com)