SBH adds free accident insurance to its SB services

State Bank of Hyderabad (SBH) today announced a free personal accident cover of Rs 1 lakh as an add-on service for its existing and new savings account holders.

The policy would be applicable to the bank's 6 million operational savings accounts, and would not involve any additional balance requirements or separate application, according to Renu Challu, managing director, SBH.

She said SBH had 8 million savings accounts, of which around 2 million were either not operational or no-frills accounts. The bank would pay a premium of Rs 10 per account for the one-year cover, which would be valid from July 1, 2011, to June 30, 2012.

This is the third bancassurance product from the bank's partnership with the general insurance firm United India Insurance Company Ltd (UIICL). The insurer also covers the assets hypothecated to the bank as part of its loans, and offers Arogya Suraksha medi-claim policy for the bank's customers.

G Srinivasan, chairman and managing director, UIICL, said bancassurance was a good model to increase penetration of insurance as it helps overcome the bottleneck of reaching potential customers. The company has a special vertical for bancassurance, and partners with 10 public sector banks, one private bank and several regional rural banks, he said.

United India eyes Rs 8,000 cr premium
United India Insurance Company Ltd expects to clock a total premium of Rs 8,000 crore this year, on the back of a "growing economy" and gaining from the hike in third party motor insurance premiums.

According to the company CMD G Srinivasan, the premium collection in 2010-11 was Rs 6,400 crore, a growth of 22 per cent over the previous year.

On the IRDA proposal to allow two or more insurance partners for bancassurance products, Srinivasan said, "Our view is that the opening up is not advisable. Bancassurance is a long-term relationship where we need to invest resources and train people. It is necessary to have a one-to-one relationship between the bank and the insurer."

The insurer is also a member of the proposed public sector third-party administrator (TPA), along with New India Assurance, Oriental Insurance and National Insurance. Srinivasan said the TPA process was on, and could take another three months.