SUD Life expects to break even in 2014-2015

Star Union Dai-ichi Life (SUD Life), a joint venture of Bank of India, Union Bank of India and Japan-based Dai-ichi Life, expects to break even by the end of current financial year.

Girish Kulkarni, managing director and chief executive officer of SUD Life, says, "This is our sixth year of operation and we are looking forward to break even in this financial year.  However, it would take us some more time to wipe out accumulated losses."

Life insurance companies, generally, take a long period of eight to ten years to achieve break even. SUD Life is, however, confident of making profits within six years as it has managed to keep its cost down from the beginning.

"We run a very tight operating budget, which coupled with our captive bancassurance model gives us cost efficiency. Last year around 93% of our business was done through bancassurance channel and the rest was from agency channel," says Kulkarni. Bank of India and Union Bank of India, the two bank partners of Sud Life, currently have 4,545 and 3,500 branches, respectively.

The insurer plans to grow it the agent channel further and plans to have 10,000 agents by 2015 against the current strength of 6,500 agents.  
 
Apart from recruiting agents the insurer also plans to review its product mix. "In the past 18 months we have shifted our focus from selling single premium to regular premium policies," says Kulkarni. Currently 67 per cent of the insurer's business comes from sale of traditional policies and the rest from unit-linked plans.

SUD Life posted a 23.3% growth in individual business premium in financial year 2013-14 at Rs 339 crore. The assets under management for the insurance company stood at Rs 4,602 crore. The insurance industry as a whole posted a jump of 11.57% with total new business premium of Rs1.19 trillion in 2013-2014.  

Other life insurers that have been able to break even include, ICICI Prudential Life, HDFC Life, Kotak Life and Aviva Life, among other players.