SBI Life Insurance posts higher Q3 profit on policy renewals, new sales

Sbi Life Insurance

17/01/2025 10:45

Jan 17 (Reuters) - India's SBI Life Insurance Company
 SBIL.NS  posted a higher third-quarter profit on Friday, led by
growth in renewed and new insurance policies. 
    Its profit rose 71% to 5.51 billion rupees ($63.6 million)
for the quarter ended Dec. 31, from 3.22 billion rupees a year
earlier. 
    The insurer's net premium income grew 11% to 248.28 billion
rupees, driven by a 13% rise in renewal premiums, or premiums
that keep policies active, and a 12% jump in first-year
premiums.
    Insurance penetration has historically been low in India,
but rising financial awareness and accelerated demand for cover
- especially for life and health insurance - after the COVID-19
pandemic has led to higher policy sales.
    The company's value of new business (VNB), or expected
profit from new policies - one of the key metrics for insurers -
rose 6% year-on-year to 42.9 billion rupees for the nine months
to the end of December. 
    Its annualised premium equivalent (APE) sales, a closely
watched metric that gives the annualised total value of all
single and recurring premium policies, was up 11% at 159.7
billion rupees for the nine month period.
    Meanwhile, market- or unit-linked insurance plans (ULIP),
which have a lower profit margin compared to term policies,
accounted for 67% of SBI Life's overall product mix by
individual APE during the quarter, up from 61% a year ago. 
    Demand for ULIPs has been strong, especially in the
first-half of the current fiscal year, driven by India's buoyant
stock market.
    The rise in the share of ULIPs, however, led to VNB margins
contracting to 26.9% for the April to December period from 28.1%
a year earlier. Its VNB margins were largely flat on a
sequential basis.
    To cushion margins, insurers have pushed for higher sales of
high-margin policies. 
    Peer HDFC Life  HDFL.NS  reported a higher quarterly profit
and an improvement in VNB margins on a sequential basis.   
    SBI Life's shares ended 1.8% higher after the results.    


($1 = 86.5910 Indian rupees)

 (Reporting by Nishit Navin and Kashish Tandon in Bengaluru;
Editing by Sonia Cheema)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))