SBI General Insurance Q1 net profit rises 126% to Rs 1.13 billion

SBI General Insurance on Tuesday reported a net profit of Rs 1.13 billion for the June quarter, up by 126 per cent from Rs 500 million recorded during the same period last year. This is the first quarter in its eight years of operations that the company has posted an underwriting profit. 

In the first quarter a year ago, the company incurred an underwriting loss of Rs 460 million, whereas in the June quarter, there has been an underwriting profit of Rs 70 million. 

Rikhil Shah, chief financial officer at SBI General Insurance, said: "We have witnessed a growth of 52% in Q1 FY 18-19 against an industry growth of 12%. The consistent growth in our business is in line with our aim to be recognised as a customer-oriented organisation. Overall, we are in an exciting phase of the business and look forward to build the momentum."  

Gross Written Premiums (GWP) has grown by 51 per cent over the past year to Rs 10.11 billion for Q1 FY2019, as against Rs 6.67 billion in Q1 FY2018. 

So far, Nagaland, Haryana and Chhattisgarh have put out tender documents for the Ayushman Bharat, National Health Protection Scheme (NHPS), and more states are expected to come out with theirs in the next few weeks. 

"We are evaluating our participation in the scheme and will consider the same subject to viable pricing. However, the scope for insurance companies involvement in this scheme has reduced to some extent since  it appears as though many of the bigger states such as UP, Bihar and Madhya Pradesh have opted for the trust model," Shah told Business Standard. 

Last year, SBI General did not underwrite crop insurance under the Pradhan Mantra Fasal Bima Yojana, while in the last June quarter, the company underwrote Rs 3 billion worth of crop insurance contracts namely from the rabi season.