| SBI Life Insurance plans to launch a guaranteed returns product for garnering about Rs 8,000 crore of the India Millennium Deposit (IMD), which are due for redemption in December 2005.
|
| |
| The returns will be market-linked, but keep in mind the cost of insurance component, said S Krishnamurthy, managing director & chief executive officer of SBI Life.
|
| |
| S Muralidharan, chief marketing officer, SBI Life, said Rs 27,000 crore of IMDs issued by State Bank of India (SBI) in US dollar, euro and pound in 2000, will be redeemed on December 29, 2005. Of this, Rs 17,000 crore are not under any lien.
|
| |
| Almost Rs 20,000 crore of IMDs are under lien as the depositors had taken loans from banks to make the investments as it offered returns much higher than the rates prevailing in overseas markets.
|
| |
| IMDs offered a return of 8 per cent per annum. The product targeted at IMDs will be a single-premium, unit-linked insurance policy (ULIP) for a term of 5 years, Muralidharan said.
|
| |
| The SBI Life officials were talking to reporters along with Eric Lombard, CEO of Cardif, the joint venture partner of SBI in the life insurance venture, and other Cardif officials, after a board meeting.
|
| |
| Krishnamurthy said the ULIP product targeted at IMD redemption proceeds is one of a slew of products planned by SBI Life.
|
| |
| The product targeted at IMD has already been filed with the Insurance Regulatory and Development Authority (Irda).
|
| |
| SBI Life will soon launch a traditional ULIP for high networth individuals (HNI) and disability cover under creditor life plans.
|
| |
| A large chunk of premium income for SBI Life comes from creditor protection schemes for housing, car and tractor loans.
|
| |
| The disability provision protects the borrower from paying the outstanding loan in the event of total inability to carry on with any occupation.
|
| |
| Gerard Binet, deputy managing director of Cardif, said the premiums for creditor protection plans have been so decided that in any case the claims ratio will not cross the 70-80 per cent mark.
|
| |
| Krishnamurthy said penetration of the creditor protection plan is hardly 10-15 per cent of the Rs 1,00,000 crore outstanding retail loans of commercial banks.
|
| |
| SBI Life has provided cover to over 30 lakh lives and 62 per cent of premium income was from bancassurance channel.
|
| |
| For selling creditor life products, SBI Life has arrangements with Union Bank of India and United Bank of India, apart from parent SBI.
|
| |
| It also has tie-ups with Sundaram Housing Finance Co and Dewan Housing Finance Co. The life insurer also provides credit card protection covers for card holders of SBI and HDFC Bank.
|
| |
| Lombard, the Cardif CEO, said bancassurance channel is growing fast and is a very effective channel for insurers as well as the insured. |
| |
|
| |
Content Guide
