Insurance cos must sell protection products first: SBI MD Ashwini Tewari

SBI Managing Director Ashwini Tewari says insurance firms should prioritise protection products over ULIPs and calls for stronger safeguards against mis-selling

Insurance companies must prioritise selling protection products, over other products, according to Ashwini Tewari, managing director, corporate banking & subsidiaries, State Bank of India (SBI). Unfortunately, the share of these products at the industry level is around 10 per cent, he said, adding he has often told SBI Life Insurance that selling unit-linked insurance plans (Ulips) is not a good idea from an insurance company’s perspective.

 

“I still tell my insurance company that selling Ulips is not a good idea from an insurer’s perspective. It is a controversial statement, but the industry itself is doing it. In my view, the first task of an insurance company should always be to sell protection. But protection, unfortunately, accounts for just 10 per cent of the industry share,” Tewari highlighted during an address at a Federation of Indian Chambers of Commerce & Industry (Ficci) event on Wednesday.

 

 

The share of Ulips in SBI Life’s product mix was 39 per cent in 2025-26 (FY26). On a new business premium (NBP) basis, share of Ulips was about 42 per cent. On an annualised premium equivalent (APE) basis, it stood at 59 per cent. SBI Life is India’s largest private sector life insurance company.

 

“For the last two years, we have been trying for a more balanced product mix by aggressively going ahead with non-Ulip policies,” Amit Jhingran, MD & CEO, SBI Life told Business Standard last month. 

 

“So how do we educate people and how do we get them to choose what is best for them? The responsibility of financial services manufacturers, providers, and distributors is immense. It is to propagate all financial services across India. The penetration levels are 4-5 per cent in most segments except for banking,” Tewari said. 

 

He added that the bank is responsible for ensuring a distributor does not go overboard with selling products. “A distributor, agent, or intermediary may promise many things and, therefore, it becomes the responsibility of the bank or similar institution to ensure that distributors do not go overboard,” he said. They must clearly explain the advantages as well as the downsides and associated risk factors, he added.

 

Even today, the distribution side often remains focused on pushing as many products as possible, particularly those that earn more for the distributor. 

 

“I know there are people who would take objection to this as everybody would say we explain (policies) very well, but in my view this is a work in progress. Which is why, while we are ready to work with industry, especially on the banking side, we have created our own entities to distribute other stuff. On the bank’s side, we distribute only our company products,” he said. 

 

While there have been discussions, and questions from regulators, around opening up the distribution of insurance and other financial products at the branch level, customers trust SBI and visit branches seeking products offered by the bank, Tewari said.

 

Last month, Finance Minister Nirmala Sitharaman said a committee of bankers was examining whether banks should be allowed exclusive distribution tie-ups for selling third-party products or adopt an open architecture model. 

 

Tewari added that business correspondents (BCs) should be utilised in a better way, so they can go beyond plain vanilla account opening to sell micro systematic investment plans or micro insurance. Banks are working with regulators on this matter. Today, there are 1.4 million BC presence points, as well as around 120,000 branches and nearly 150,000 ATMs. 

 

“(While) some level of mis-selling may happen, we need to control that, not let it go out of hand… Therefore, (we should determine) how do we leverage the 1.4 million BC points to distribute other financial services and we have to, of course, train them well, digitally enable them and also provide them helplines in different industries,” he said.