SBI, Australian partner in talks to raise stake to 49% in general insurance venture

Currently, the State Bank's Australian partner holds 26% stake

State Bank of India (SBI) and its Australian partner Insurance Australia Group (IAG) have initiated talks to increase the Australian partner's stake in the insurance ventures.

Steve Hollow, Deputy CEO, SBI General Insurance, who was in Chennai to announce company's health insurance policy - 'Group Health Insurance' product said "talks with SBI has commenced on increasing the stake in the company. The shareholder's agreement provide for increasing stakes in the company."

He said they are waiting for Parliament's approval, which would allow the foreign partner to increase the stake upto 49%. Recently, the Centre passed the Insurance Ordinance allowing increasing the foreign equity holdings up to 49%.

Currently SBI holds 76% stake in SBI General Insurance, while IAG holds 26%.

Speaking about company's performance, he said, the company is hoping to close this fiscal with a premium of Rs.1,600 crore and in the next fiscal company's plans to increase it by 50%. "Major portion would come from the motor insurance portfolio," said Hollow, adding that the company would also increase its marine cargo - transit insurance and liability portfolios.

Currently of the total premium around 35% comes from Motor, another 35% from fire, 20% from personnel accident and 10% health and miscellaneous. Currently health insurance accounts to two% and the company to increase it to 25%. The company did not give any time frame.

To support the target the company is also planning to increase the agents strength from the current 6,000 to 15,000 and planning to rope in other SBI's banking subsidiaries for selling its products. Hollow said the company is posting underwriting loss and hopes to break-even at the underwriting level next year.