Won't chase top-line growth at any cost: SBI General CEO on fire insurance pricing war

Naveen Chandra Jha, managing director and chief executive, SBI General Insurance, says the insurer will not chase fire insurance business at unsustainable prices as intense competition pushes premiums lower in this revenue stream.

In wide-ranging discussions with Shilpy Sinha, Jha talks about the expense of management (EOM) cap, health insurance penetration, mis-selling and the company’s potential listing.

Also read: SBI General Insurance Q1 GDPI rises to Rs 3,506 crore; comprehensive income jumps 17%


Edited excerpts:

Where does SBI General stand on EOM?

We are at around 26%-27%, against the 30% limit. We have a lot of headroom, but we don’t want to go beyond this. Insurance is not a very profitable industry. The industry has a premium (revenue)of around Rs 3.35 lakh crore and total profit of only about Rs 13,000 crore. What is the business sense of simply chasing top-line growth? The industry has to improve profitability.

Why did your profit and combined ratio trend lower during the first quarter?

Our combined ratio was 96.18% and PBT was Rs 569 crore in the first quarter of FY27, compared with Rs 608 crore in the first quarter of FY26. Comprehensive income rose 17.4% to Rs 573 crore in the quarter. PAT was Rs 426 crore against Rs 456 crore a year ago.The decline was mainly because of one-off provisions, including the Supreme Court directive (on accidental death liabilities for homemakers) and crop receivables. Around Rs 36 crore was provided for the Supreme Court order. Without these provisions, the profit would have been similar to that of last year.

Fire insurance is seeing intense competition, with discounts going up to 99%. What is your strategy?

We are strong in fire. Being part of the SBI group, we have access to a large corporate client base. SBI group commands more than 25% of corporate clients, while fire for us contributes around 6%-7% of the total market size. Since we are an underwriting-driven company, our fire premium reduction has been higher than the industry. Industry premium declined around 28%, while ours declined around 36%. For certain businesses, we felt the price was not right and decided not to write them.

Do you see the market improving?

It is not improving yet, but there is hope that it will. At least it is not deteriorating further. October 1 will be an important date for fire because there will be a lot of renewals. That will give us a better indication of whether pricing is improving.

Health insurance seems to have an even bigger protection gap.

The percentage of people paying from their own pocket is huge. We have 30 health-focused branches in Andhra Pradesh and Telangana manned by just two people in some cases in August 2025, but the purpose is to reach the last mile. The combined branches of all insurance companies total around 22,000, while SBI alone has around 23,000 branches. The potential to use that network to reach the last mile is enormous.

How do you address regulator concerns about mis-selling, particularly through banks?

Four things are extremely important — suitability, transparency, convenience and fairness.

Also read: Banks, companies better positioned to weather next downturn: CS Setty, SBI, Chairman

First is suitability. If someone already has adequate health insurance, you should not push another product simply because you want to sell it. Second is transparency. Inform the customer what is covered, not covered and terms. Third is convenience. Provide policy documents soon after the person buys a policy. Fourth is fairness, especially at the time of claims. The customer should not run around to get the claim settled. The bank’s strength can be used to increase insurance penetration, particularly in health insurance.

Hospitals are still resisting standard protocols and pricing. How does this deadlock end?

There is a committee looking at these issues. The industry must introspect. We cannot simply look outside and blame somebody else. If the industry is not profitable, how will it survive in the long term? There must be leadership in insurance. We need the larger players to take a stand on sustainable pricing and customer service.

Is aggressive pricing by insurers making the problem worse?

There have been instances where companies have quoted very low prices simply to win business. We saw this in group medical insurance. We decided not to participate in certain businesses at unsustainable prices. We are now looking at service quality before deciding on business.

Is SBI General planning to list?

Earlier, I used to say two subsidiaries are planning to go public. SBI Funds Management has already been listed; so, obviously SBI General is the other one. I can’t say when it will be done. Performance should be more important than listing.