SBI Life Q2 FY25 Earnings: 38% PAT Growth, ₹157.2B NBP, AUM Up 27%

On October 23, 2024, for the half year ending September 30, 2024, SBI Life Insurance maintained its leadership in the private market with a New Business Premium (NBP) of ₹157.2 billion, holding a 21.3% market share. It also led the individual NBP segment, recording ₹114.9 billion, marking a 13% growth and a 25.7% market share. The company’s Annualised Premium Equivalent (APE) reached ₹90.3 billion, reflecting 9% growth, while its agency channel saw an impressive 32% increase in APE to ₹28.2 billion.

SBI Life also improved its persistency ratios at both the 25-month and 61-month marks by 116 basis points and 438 basis points, respectively. The Value of New Business (VoNB) stood at ₹24.2 billion, with a VoNB margin of 26.8%. Profit after tax (PAT) surged 38% to ₹10.5 billion. The company’s solvency ratio remained strong at 2.04, and its assets under management (AUM) grew by 27% to ₹4.4 trillion. Additionally, its operating return on embedded value reached 19.5%.

Business Growth and Market Share

SBI Life Insurance has retained its leadership in the individual-rated premium segment, achieving ₹81 billion in H1 FY25, with a 22.7% market share in the private sector. Individual new business premiums grew by 13%, reaching ₹114.9 billion. Additionally, protection new business premium stood at ₹17.2 billion during the same period. The company’s gross written premium (GWP) grew by 7%, amounting to ₹359.9 billion. This growth was primarily driven by an 11% increase in new business regular premiums and a 16% rise in renewal premiums.

Distribution Network

SBI Life Insurance has a robust distribution network consisting of 333,080 trained professionals, including agents, CIFs, and SPs. It operates across 1,082 offices nationwide. The distribution network is well-diversified, including bancassurance, agency channels, and various other partners such as corporate agents, brokers, micro agents, and web aggregators. In terms of APE channel mix for H1 FY25, bancassurance contributed 59%, the agency channel 31%, and other channels 10%. Notably, individual NBP from the agency channel increased by 39%, reaching ₹33.1 billion, while the other channels grew by 28% to ₹15.6 billion.

Cost Efficiency

SBI Life’s total cost ratio increased slightly to 10.6% in H1 FY25 from 10.0% in H1 FY24. The commission ratio remained steady, rising marginally from 4.6% to 4.7%. Meanwhile, the operating expense ratio increased from 5.4% to 5.8% during the same period.

Profitability

Profit after tax (PAT) for H1 FY25 surged by 38%, reaching ₹10.5 billion. The value of new business (VoNB) also increased by 2% to ₹24.2 billion, with the VoNB margin holding steady at 26.8%.

Persistency

The company saw significant improvement in its persistency ratios, with the 25th-month and 61st-month persistency rising by 116 and 438 basis points, respectively. This improvement is attributed to the company’s focus on enhancing the quality of its business and customer retention.

Assets Under Management

SBI Life’s assets under management (AUM) grew by 27%, rising from ₹3,451.5 billion in September 2023 to ₹4,389.5 billion by September 2024. The AUM’s debt-equity mix is 60:40, with over 95% of debt investments in AAA-rated and sovereign instruments.

Financial Position

The company’s net worth increased by 16%, reaching ₹162.6 billion as of September 30, 2024, compared to ₹139.7 billion a year earlier. SBI Life also maintained a strong solvency ratio of 2.04, well above the regulatory requirement of 1.50, indicating its solid financial position.

Sbi Life Insurance Company Ltd’s share price opened at ₹1,703.20, touched the day high of ₹1,728.90 and closed at ₹1,711.70.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.