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Results
27-Jul-21
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Analysis
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SBI Life Insurance Company
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Premium growth subdued, higher provision impacts profitability
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SBI Life Insurance Company has posted 43%
decline in the net profit of Rs 223.16 crore in the quarter ended June 2021 (Q1FY2022).
The company has posted 10% increase in net premium collection to Rs 8312.55
crore in Q1FY2022, aided by 10% growth in the renewal business to Rs 5030 crore,
while new business premium rose 9% to Rs 3350 crore in Q1FY2022.
The company has created additional reserve of Rs 444.72
crore towards COVID-19 pandemic at end June 2021.
The Company has achieved private market leadership in
Individual Rated Premium of Rs 1390 crore with private market share of 18.9% in
Q1FY2022.
Total Cost ratio for Q1FY2022 is 10.5% against 10.1% for
Q1FY2021. Commission ratio for Q1FY2022 is 3.2% against 3.1% for Q1FY2021. Operating
Expense for Q1FY2022 is 7.2% compared with 7.0% in Q1FY2021.
New Business APE galloped 28% to Rs 1620
crore in Q1FY2022 from Rs 1270 crore in Q1FY2021.
The Value of New Business (VoNB) improved
42% to Rs 340 crore in Q1FY2022, while VoNB margins improved to 21.24% in Q1FY2022
from 18.7% in Q1FY2021.
Individual rated premium (IRP) has increased
32% to Rs 1390 crore in Q1FY2022, while Individual New Business Premium improved
37% to Rs 1840 crore in Q1FY2022.
Total protection new business premium
has increased 48% to Rs 430 crore in Q1FY2022 from Rs 290 crore in Q1FY2021.
The share of total protection NBP (individual and group) has increased to 12.8%
in Q1FY2022 from 9.5% in Q1FY2021.
AuM has grown by 32% from Rs
175350 crore end June 2020 to Rs 231560 crore end June 2021 with debt-equity
mix of 72:28. Over 90% of the debt investments are in AAA and Sovereign
instruments.
The Company’s net worth increased by 14% from Rs 9310 crore
end June 2020 to Rs 10580 crore end June 2021.
The solvency ratio was at 2.15x as against the regulatory
requirement of 1.50x.
Strong growth in 13th month persistency by 295 bps to
84.50% for Q1FY2022 as compared to 81.55% in Q1FY2021 due to focus on improving
the quality of business and customer retention. Further, 61st month
persistency for Q1FY2022 stands at 60.88%.
The Company has strong distribution network of 212,821
trained insurance professionals consisting of agents, CIFs and SPs along with
widespread operations with 947 offices across country.
The Company has diversified distribution network
comprising of strong bancassurance channel, agency channel and others
comprising of corporate agents, brokers, micro agents, common service centers,
insurance marketing firms, web aggregators and direct business. NBP channel mix
for Q1 FY2022 is bancassurance channel 45%, agency channel 19%, and other
channels 36%.
The embedded value per share stood at Rs 333.9
per share end June 2021.
Financial
Performance FY2021
Gross written premium has
increased by 24% to cross Rs 50000 crore mark. The increase in GWP is mainly
due to strong growth in RP by 23% from Rs 24040 crore in FY2020 to Rs 29630 crore
FY2021.
New Business Premium (NBP)
has increased by 24% from Rs 16590 crore in FY2020 to Rs 20620 crore in FY2021.
The Company has achieved market leadership in NBP with 21.9% private market
share in FY2021. The Company has also achieved market leadership with IRP of Rs
10220 crore securing 22.6% private market share in FY2021.
Total Cost ratio has
decreased to 8.3% in FY2021, from 9.9% in FY2020. Commission ratio has
decreased to 3.5% in FY2021 from 4.0% in FY2020. Operating Expense has
decreased to 4.8% in FY2021, from 5.9% in FY2020.
Value of New Business (VoNB)
increased by 16% to Rs 2330 crore in FY2021. VoNB margin increased by 170 bps
from 18.7% in FY2020 to 20.4% in FY2021. Value of New Business (VoNB) increased
by 20% to Rs 2660 crore for FY2021 (with effective tax rate).
Profit after Tax (PAT) grew
by 2% in FY2021 to Rs 1460 crore from Rs 1420 crore in FY2020.
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SBI Life Insurance:
Results Policyholders Account
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2106 (3)
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2006 (3)
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Var %
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2103 (12)
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2003 (12)
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Var %
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Premium earned (net)
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8312.55
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7588.09
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10
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49768.28
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40324.01
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23
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Income from
Investments
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7409.91
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8582.80
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-14
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31456.01
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2996.79
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950
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Other income
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14.45
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7.16
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102
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35.81
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45.76
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-22
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Contribution from the
Shareholders` account
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0.00
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0.00
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-
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824.79
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476.28
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73
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Total Income
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15736.91
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16178.05
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-3
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82084.89
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43842.84
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87
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Commission
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261.69
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225.34
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16
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1742.53
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1566.22
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11
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Op. expenses related
to Insurance business
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613.67
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546.06
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12
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2448.50
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2471.80
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-1
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Others
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145.11
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12.71
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1042
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472.08
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677.58
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-30
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Benefits paid (Net)
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4791.77
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2852.76
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68
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21582.65
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16250.93
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33
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Change in valuation of
policy liabilities
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9776.65
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11692.05
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-16
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53934.16
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20604.86
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162
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Provision for taxation
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36.11
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239.32
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-85
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97.56
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376.74
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-74
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Total Expense
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15625.00
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15568.24
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0
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80277.48
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41948.13
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91
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PAT
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111.91
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609.81
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-82
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1807.41
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1894.71
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-5
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Transfer to
Shareholders` account
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-41.21
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282.23
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PL
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1678.76
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1462.65
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15
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SBI Life Insurance:
Results Shareholders Account
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2106 (3)
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2006 (3)
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Var %
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2103 (12)
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2003 (12)
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Var %
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Amounts transferred
from Policyholders` account
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-41.21
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282.23
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PL
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1678.76
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1462.65
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15
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Income from
investments
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284.71
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96.44
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195
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694.79
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483.49
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44
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Total Income
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243.50
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378.67
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-36
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2373.55
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1946.14
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22
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Expenses (apart from
Insurance)
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10.08
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9.53
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6
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30.98
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48.30
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-36
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Contribution to
policyholders account
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0.00
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0.00
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-
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824.79
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476.28
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73
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Others
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0.00
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-18.54
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-
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-24.68
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8.02
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LP
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Total Expenses
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10.08
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-9.01
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PL
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831.09
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532.60
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56
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PBT
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233.42
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387.68
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-40
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1542.46
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1413.54
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9
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Tax
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10.26
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-3.21
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LP
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86.61
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-8.63
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PL
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PAT
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223.16
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390.89
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-43
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1455.85
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1422.17
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2
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EPS (Rs)*
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8.9
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15.6
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14.6
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14.2
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* on current equity of
Rs 1000.15 crore of face value of Rs 10 each, PL: Profit to Loss, LP: Loss to
Profit
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Figures in crore,
Source: Capitaline Corporate Database
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