WE HAVE JUST TAPPED 40% OF SBI NETWORK

SBI Life MD and CEO wants the company to be market leader in 3 years. Uday Sankar Roy, the new managing director and CEO of SBI Life Insurance Company, has set an ambitious target of making the subsidiary of State Bank of India (SBI) the largest player among new players within five years. In an interview to Business Standard, Roy sounded confident that the strength and reach of SBI will catapult SBI Life to the position of an undisputed leader after LIC. Roy has taken charge at SBI Life after serving at the parent bank for 36 years at various senior positions. Excerpts from the interview: How different is insurance from banking? Banking products are bought by customers whereas insurance products are sold to customers. To sell insurance, one has to reach out to people and convince them. This requires a high degree of selling skills. Also there has been a major shift in the way the young generation thinks about future planning. Youngsters today do not see themselves working till 60 years of age. So there is a need to convince young people to use insurance to meet their financial needs after their planned working life. Where do you see SBI Life say a few years from now? We want SBI Life to be the market leader (after Life Insurance Corporation) in the next three to five years. We want to be the undisputed leader among new life insurers, with the gap between SBI Life and other private sector life insurers large enough for us to be described as the “undisputed” leader just behind LIC. The aim is to take SBI Life to a position where SBI is. How will you achieve it? SBI is our strength. We have till now tapped only 40 per cent of the 14,000-strong branch network of SBI and its associate banks. Unlike competitors, we do not have to set up large number of offices as we can achieve the intended reach through SBI group’s network. As we move towards our goal of becoming the market leader, we would have tapped about 80 per cent of the branch network of SBI group. We will also be increasing the number of agents (from 15,000 now to 20,000 by next year), but our primary channel will remain SBI branches. SBI hasn’t done as well as it should have considering the fact that the SBI brand is synonymous with trust. Some other private players are doing well despite not having the backing of a strong institutional brand. Why? We have 3 to 4 per cent market share at present and you can say that we are going through a warming up period. We can’t follow the model of other life insurers as we already have SBI branches. An insurance company spends Rs 20 to 30 lakh on a branch besides additional management expenses. We have to train people at the bank. Since we follow the bancassurance model more diligently, our bank employee is a financial advisor-cum-insurance seller. Besides, protecting the SBI brand is also important. Is there any plan to create more brand awareness about SBI Life? We do have plans. We are talking to market research firms for getting to know the market perception of our company and also advertisement agencies for a brand campaign to get visibility at the mass level. In another six months time we should be finalising a campaign.

Source: Business Standard, April 8, 2007