India's SBI Life posts higher Q1 profit on demand for market-linked policies

Sbi Life Insurance

24/07/2024 11:40

BENGALURU, July 24 (Reuters) - India's SBI Life
Insurance Company  SBIL.NS  posted a 36% rise in first-quarter
profit on Wednesday, as premiums were boosted by strong demand
for market-linked products.
    The insurer's profit rose to 5.2 billion rupees ($62
million) for the three months ended June 30 from 3.81 billion
rupees, a year earlier.
    Net premium income increased about 15%, while investment
income rose 32%.
    Demand for market-linked insurance plans (ULIPs) has jumped
sharply in recent quarters driven by a rally in India's equity
market. Benchmark indexes NSE Nifty 50  .NSEI  and the S&P
Sensex  .BSESN  hit record highs in recent months on strong
economic growth outlook and foreign fund inflows.  .BO 
    SBI Life's value of new business (VNB), or expected profit
from new policies, rose 12% year-on-year to 9.7 billion rupees
in the June quarter.
    Annualised premium equivalent (APE) sales, a key metric that
gives the annualised total value of all single premium and
recurring premium policies, rose 20% to 36.4 billion rupees for
the quarter.
    ULIPs accounted for 61% of the company's overall product mix
by APE for the quarter, compared to 53% a year earlier.
    The rise in sales of ULIPs, which have a lower profit
margin, has resulted in the contraction of the value of new
business margins for insurers.
    SBI Life's VNB margin declined to 26.8% for the April-June
quarter from 28.8% a year earlier.
    Peers, HDFC Life  HDFL.NS  and ICICI Prudential Life
 ICIR.NS  also reported a drop in VNB margin for the June
quarter. 
    SBI Life's shares ended 2.4% higher ahead of the results.
    


($1 = 83.6860 Indian rupees)

 (Reporting by Nishit Navin; Editing by Eileen Soreng)
 ((Nishit.Navin@thomsonreuters.com;))