SBI General hopes to break-even in FY16

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SBI General Insurance is hopeful of breaking even by the end of the next fiscal with its focus on retail segment, a top company official has said.

"We aim to be break-even by FY16. This was our initial target and we are hopeful of achieving it during this period," SBI General Managing Director and Chief Executive Bhaskar J Sarma told PTI.

The subsidiary of banking behemoth SBI, which started operations in 2010, has already witnessed its combined ratio coming down last financial year.

Combined ratio is a critical measure of profitability in which a ratio below 100 indicates underwriting profit, and over 100 shows an insurance entity is paying out more money than its earns as premium.

Sarma said SBI General's combined ratio is likely to be around 130 per cent in FY14 from 210 per cent reported in the previous fiscal. "As we expand operations and earn more premium, the combined ratio will come down."

While a general insurer usually has a high combined ratio initially for setting up operations, it comes down as premium incomes go up in later years.

Sarma said the insurer has earned a yield of around 9 per cent from an investment corpus of around Rs 1,700 crore as of the December quarter of last fiscal.

The company is a joint venture between State Bank and Insurance Australia Group with the former holding a majority stake of 74 per cent.

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