SBI General Aims for 8% Boost in Combined Ratio, Says CEO

SBI General Insurance has set a target to improve its combined ratio by between 6 and 8 percentage points over the next two financial years. In an interview with Moneycontrol, Managing Director and Chief Executive Officer Naveen Chandra Jha outlined the insurer’s strategy, which includes enhanced underwriting practices, robust analytics, and ongoing investment in distribution channels. Currently, the company’s combined ratio stands at 109 percent.

Jha emphasized that the company is focusing on better risk selection, streamlined claims processes, and improved portfolio quality, which are expected to positively influence performance. As the financial year progresses towards the end of the third quarter, he noted that maintaining momentum from the first half remains a priority. The company aims to expand its presence in both retail and commercial sectors, with significant growth anticipated in high-potential areas like retail health insurance and the small and medium enterprise (SME) segment.

In the first half of the financial year 2026 (H1 FY26), SBI General reported broad-based growth across key business lines. Health insurance grew by a remarkable 41 percent, personal accident insurance by 48 percent, and motor insurance by 17 percent.

Impact of GST on Premiums

The introduction of Goods and Services Tax (GST) has had a noticeable impact on the insurance sector, according to Jha. He explained that the company experienced a 2-3 percent hit to its bottom line due to disallowance of input credit. Nevertheless, he noted that the reduction in GST has made health insurance more affordable, resulting in increased interest and better conversion rates, especially in individual health policies.

Jha stated, “With the out-of-pocket premium coming down, customers are more comfortable making the purchase. We have passed on the GST benefit fully to customers.” He added that by the end of this year, the input tax credit (ITC) impact is expected to be minimal. While acknowledging the short-term effects of GST implementation, he reassured stakeholders that it does not significantly alter the company’s financial position.

Post-GST changes, motor insurance growth has accelerated, leading to an expectation that SBI General’s current market share of 4.82 percent will continue to increase. Within the motor category, the two-wheeler segment has become a focal point of the insurer’s strategy, with plans to grow this area selectively and profitably, particularly as the five-year third-party requirement offers a longer profitability cycle.

Future Growth Prospects

Jha highlighted that health insurance remains a strong growth driver for the company, reinforcing its importance in the overall business mix. Health insurance currently contributes 23 percent, while motor insurance accounts for 32 percent of the total product portfolio.

Looking ahead, SBI General aims for a balanced mix of products, with a commitment to strengthening its underwriting practices and enhancing risk selection to improve portfolio quality. Jha expressed confidence that these efforts will lead to an improvement in the combined ratio by 6-8 percent over the next two years.

The general insurance sector is on an upward trajectory, closely linked to economic growth. Jha believes there is ample room for expansion for all players, though he noted that consolidation will depend on various factors and may not necessarily occur.

SBI General’s proactive approach in refining its operational strategies and adapting to market changes positions the company well to navigate future challenges while delivering value to its customers and stakeholders.