Summary of earnings call for SBI Life Insurance Company Ltd published on 31 Jul, 2025
SBI Life Insurance Company Ltd.
Q1 FY26
Call date · July 24, 2025
1 · Management Commentary
Key Positives
- Strong growth in new business premium (INR72.7 billion, private market share 21.3%) and individual rated new business premium (INR34.7 billion, 8% growth).
- Gross written premium up 14% YoY to INR178.14 billion; profit after tax up 14% to INR5.94 billion.
- Value of new business (VoNB) grew 12% to INR10.9 billion; VoNB margin improved to 27.4% (+62 bps).
- Asset under management (AUM) rose 15% YoY to INR4.76 trillion.
- Persistency ratios improved: 13th month at 87.12% (+58 bps), 61st month at 62.8% (+501 bps).
- Protection segment APE grew 53%, now 11.7% of total APE.
- Agency and bancassurance channels remain strong; agency productivity and expansion continue.
Key Negatives
- Agency growth (6%) was lower than internal expectations, though above industry average.
- Opex ratio increased slightly to 6.3% (from 6.1% YoY); total cost ratio at 10.8% (from 10.5%).
- Persistency challenges in the 49-month cohort remain unresolved.
- Competitive pricing pressure in non-par and group term segments persists.
Forward Guidance
- Continued focus on agency expansion and branch openings, including Tier 3/4 cities.
- Ongoing investment in digital infrastructure and online channels.
- Product launches planned: revamped protection products (including lower sum assured), new money-back plan for par portfolio, and enhanced health segment offerings.
- Guidance maintained: mid-teens growth in individual APE, VoNB margin guidance of 26–28% with positive bias.
- Strategic focus on balanced product mix, margin protection, and sustainable growth.
2 · Q&A Highlights
Q 1 (Composite): What is the outlook for agency growth, productivity, and impact of branch expansion on margins and opex?
A (Management):
• Agency growth (6%) outpaced industry (1%) but was below internal targets due to a high base; productivity and expansion expected to drive future growth.
• Branch expansion and agent additions are not expected to materially impact opex margins, as incremental business offsets costs.
Q 2 (Composite): What are the drivers of margin expansion and product mix changes across channels?
A (Management):
• Margin expansion driven by shift towards non-par and protection products, active repricing, and new rider attachments (40% rate).
• Product mix improvements in agency; banca mix also improving, with further alignment expected.
Q 3 (Composite): What explains the divergence between sum assured and APE growth in protection, and what is the outlook for group protection and Credit Life?
A (Management):
• Higher sum assured growth due to shift from TROP to pure protection; APE growth lower as pure protection has lower premiums.
• Both Credit Life (+25%) and group term insurance (GTI) showed strong growth; GTI is lumpy and may not sustain high growth every quarter.
Q 4 (Composite): Is there any change in growth guidance, especially for banca, given recent trends and media reports?
A (Management):
• No change in guidance; mid-teens growth in individual APE maintained.
• No formal regulatory or government direction affecting banca; growth trends remain positive.
Q 5 (Composite): What is the competitive environment in non-par and agency, and how is SBI Life positioned?
A (Management):
• Non-par segment remains highly competitive; active repricing to protect margins.
• Agency competition is ongoing but SBI Life’s consistent strategy, support structure, and brand strength ensure resilience.
Q 6 (Composite): What are the plans for rider attachment, product launches, and digital initiatives?
A (Management):
• Rider attachment rate at ~40%, expected to improve further; riders classified under respective product categories.
• New protection and money-back products planned; digital channel investments continue.
Q 7 (Composite): What is the outlook for opex and cost ratios?
A (Management):
• Opex ratio expected to remain stable (6–6.5%) despite infrastructure and digital investments; incremental business to rationalize costs.
3 · Other Key Numbers
- New business premium: INR72.7 billion
- Private market share (new business): 21.3%
- Individual rated new business premium: INR34.7 billion (8% growth)
- Private market share (individual rated): 22.3%
- Gross written premium: INR178.14 billion (14% growth)
- Profit after tax: INR5.94 billion (14% growth)
- Value of new business (VoNB): INR10.9 billion (12% growth)
- VoNB margin: 27.4% (+62 bps YoY)
- Indian embedded value (IEV): INR742.6 billion
- Asset under management (AUM): INR4.76 trillion (15% growth)
- Solvency ratio: 1.96 (regulatory requirement: 1.50)
- 13th month persistency: 87.12% (+58 bps)
- 61st month persistency: 62.8% (+501 bps)
- Opex ratio: 6.3%; Total cost ratio: 10.8%
- Death claim settlement ratio: 98.44%
- Mis-selling ratio: 0.02%
- Individual ULIP new business: INR27.4 billion (55% of individual new business)
- Individual protection new business: INR1.7 billion (10% growth)
- Group new business premium: INR23.3 billion (32% of new business premium)
- Group protection new business: INR8.1 billion (43% growth)
- Credit Life new business: INR5.9 billion (25% growth; 1.6% of overall business)
- Total annuity and pension new business: INR15.5 billion
- Number of new policies issued: 4.07 lakh
- Number of lives covered: 4.4 million
- Number of agents added (gross): 31,000+
- Number of new branches opened: 36
- Bancassurance (SBI & RRB) APE contribution: 58%; individual APE: INR22.4 billion (8% growth)
- SBI branch productivity (individual APE): INR3.8 million (7% growth)
- Agency individual rated premium: INR10.88 billion
- Agency productivity: INR2.15 lakh (individual NBP terms)
- Agency ULIP share: 59% (vs 68% YoY)
- Agency individual sum assured growth: 78%
- Other channels (direct, brokers, online, web): 16% growth; 14% of total APE
- Online channel individual rated premium growth: 46%; protection business growth: 58%
- Digital proposal submission: 99%; automated underwriting: 62%
- Rider attachment rate: ~40%
- Group protection (Credit Life + GTI): ~60% of total protection number
- Product mix (guaranteed non-par savings): 19% of individual APE
- Persistency (49-month): Not disclosed (cohort remains a challenge)
- Rider premium as % of Individual APE: Much less than 4–5% (exact figure not disclosed)
Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.