Capitaline

Results 27-Apr-23

Analysis

SBI Life Insurance Company

Steady performance, VNB margins improves

SBI Life Insurance Company has posted 16% increase in the net profit of Rs 776.85 crore in the quarter ended March 2023 (Q4FY2023). The company has posted 14% increase in net premium collection to Rs 19896.92 crore in Q4FY2023, aided by 10% growth in the renewal business to Rs 11940 crore, while new business premium jumped 21% to Rs 8080 crore in Q4FY2023. The Company has maintained its leadership position in Individual Rated Premium of Rs 15220 crore with 22.3% private market share in FY23. There is strong growth in Individual New Business Premium by 16% to Rs 5670 crore in Q4FY23. New Business Premium (NBP) increased 21% to Rs 8080 crore in Q4FY23.

Gross Written Premium (GWP) increased 14% to Rs 20020 crore in Q4FY23 mainly due to 21% jump in First Year Premium (FYP), while Renewal Premium (RP) increased 10% in Q4FY23.

Strong growth in 37th month and 61st month persistency (based on premium considering Regular Premium/Limited Premium payment under individual category) in FY23 by 236 bps and 612 bps respectively due to our focus on improving the quality of business and customer retention.

13th month persistency (based on premium considering Single Premium and Fully Paid-up policies & group business where persistency is measurable) is 88.91% in FY23 vs 88.35% in FY22. Persistency ratio has improved in FY23 in majority of cohorts.

VoNB increased by 23% to Rs 1440 crore for Q4FY23.

AuM grew by 15% from Rs 267410 crore end March 2022 to Rs 307340 crore end March 2023 with debt-equity mix of 71:29. Over 94% of the debt investments are in AAA and Sovereign instruments.

The Company’s net worth increased by 12% from Rs 11620 crore end March 2022 to Rs 13020 crore end March 2023.

Robust solvency ratio of 2.15x end March 2023 as against the regulatory requirement of 1.50x indicating strong financial position of the Company.

The Company has strong distribution network of 275,374 trained insurance professionals consisting of agents, CIFs and SPs along with widespread operations with 992 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.

Indian Embedded Value (IEV) stood at Rs 464.0 end March 2023.

Financial Performance FY2023

Profit after Tax (PAT) increased 14% to Rs 1720.57 crore for FY23. The company has posted strong growth in Individual New Business Premium by 27% to Rs 20910 crore in FY23. New Business Premium (NBP) has grew by 16% to Rs 29590 crore in FY23 aided by growth in Regular premium business by 17%.

Protection New Business Premium has increased by 19% from Rs 3050 crore in FY22 to Rs 3640 crore in FY23 due to growth in individual protection business by 6% to Rs 1000 crore and growth in group protection business by 25% to Rs 2640 crore in FY23.

Gross Written Premium (GWP) has grew by 15% to Rs 67320 crore in FY23 mainly due to 17% growth in Regular Premium (FYP) and 13% growth in Renewal Premium (RP) in FY23.

APE channel mix for FY23 is bancassurance channel 64%, agency channel 26% & other channels 10%.

NBP of Agency channel has increased by 19% to Rs 5490 crore in FY23 and NBP of Banca channel has increased by 33% to Rs 17830 crore in FY23 as compared to same period last year.

Total Cost ratio for FY23 is 9.6% against 8.8% for FY22. Commission ratio for FY23 is 4.5% against 3.7% for FY22. Operating Expense ratio for FY23 is 5.1% against 5.1% in FY22.

VoNB increased by 37% to Rs 5070 crore for FY23. VoNB margin increased by 420 bps to 30.1% in FY23.

SBI Life Insurance: Results Policyholders Account
	2303 (3)	2203 (3)	Var %	2303 (12)	2203 (12)	Var %
Premium earned (net)	19896.92	17433.77	14	66581.00	58432.29	14
Income from Investments	1186.13	2999.49	-60	13260.14	23567.95	-44
Other income	14.86	12.47	19	49.85	44.81	11
Contribution from the Shareholders` account	1707.49	982.15	74	1707.49	982.15	74
Total Income	22805.40	21427.88	6	81598.48	83027.20	-2
Commission	871.40	677.86	29	2935.96	2084.05	41
Op. expenses related to Insurance business	1001.78	899.88	11	3536.00	3048.69	16
Others	234.52	275.28	-15	832.32	782.87	6
Benefits paid (Net)	9123.16	7373.36	24	30287.46	31339.82	-3
Change in valuation of policy liabilities	9604.33	10892.07	-12	41003.10	43761.85	-6
Provision for taxation	27.96	31.07	-10	147.40	126.16	17
Total Expense	20863.15	20149.52	4	78742.24	81143.44	-3
PAT	1942.25	1278.36	52	2856.24	1883.76	52
Transfer to Shareholders` account	2302.77	1471.15	57	2707.15	1732.43	56

SBI Life Insurance: Results Shareholders Account
	2303 (3)	2203 (3)	Var %	2303 (12)	2203 (12)	Var %
Amounts transferred from Policyholders` account	2302.77	1471.15	57	2707.15	1732.43	56
Income from investments	212.83	238.27	-11	795.25	988.41	-20
Total Income	2515.60	1709.42	47	3502.40	2720.84	29
Expenses (apart from Insurance)	11.82	12.25	-4	37.23	156.98	-76
Contribution to policyholders account	1707.49	982.15	74	1707.49	982.15	74
Others	2.70	20.96	-87	-0.76	20.96	-104
Total Expenses	1722.01	1015.36	70	1743.96	1160.09	50
PBT	793.59	694.06	14	1758.44	1560.75	13
Tax	16.74	21.91	-24	37.87	54.76	-31
PAT	776.85	672.15	16	1720.57	1505.99	14
EPS (Rs)*	31.0	26.9		17.2	15.0
Embedded Value (Rs) per share	464.0	396.2		464.0	396.2
* on current equity of Rs 1000.89 crore of face value of Rs 10 each, PL: Profit to Loss, LP: Loss to Profit
Figures in crore, Source: Capitaline Corporate Database

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