Even though Irda has allowed banks to tie-up with three insurers from each segment of life, non-life and health to sell their products, State Bank of India has said it will only market schemes of its subsidiaries.
As per a notification issued by the regulator on September 15, banks are now allowed to tie-up with insurers to sell products through their branches. However, it has not been made mandatory for banks to go for such partnerships.
SBI has tied up with Insurance Australia Group (IAG) for its general insurance venture and with Cardif for life insurance business. "We entered into some contractual obligations with our foreign partners at the time of signing the JV agreement with them. As it is not mandatory (to sell products of other insurance firms), we are not looking at it right now," SBI Chairperson Arundhati Bhattacharya told PTI.
The State-run lender currently sell schemes of its subsidiaries (SBI Life and SBI General) and this arrangement will continue, she said.
However, she said the bank is not against brokers being allowed to appoint sub-brokers to sell insurance plans as it will help increase insurance penetration. "The bank branch mode is a very different kind of sale model.
We use these branches to sell only low margin products which are also simple and easy to sell over the counter. But when it comes to complex products, it can be done by sub- brokers. "Insurance penetration is so low that I don't think it will make any difference to us.
I believe both the agency and bancassurance channels can co-exist," she said. SBI has hired consultancy firm PwC to carry out the valuation of its general insurance joint venture, SBI General.
Similarly, its foreign partner IAG has roped in Deloitte for valuation of SBI General. However, hiring of consultants for conducting the valuation exercise of SBI Life was still on from both sides -- SBI and its foreign partner Cardif.