SBI Life Insurance Q2 Results: Net Premium Growth Drives Profit

The private insurer’s profit surged 53% year-on-year to Rs 377 crore in Q2.

<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

SBI Life Insurance Co.’s second-quarter profit rose supported by a growth in net premiums.

The private insurer’s profit surged 53% year-on-year to Rs 377 crore in the quarter ended September, according to its exchange filing. That compares to the Rs 263-crore profit estimated by the Bloomberg consensus.

Sequentially, the bottom line expanded 43%.

The company earned a net premium of Rs 16,477 crore, a 12% increase over a year earlier.

SBI Life Q2 FY23 Highlights (YoY)

  • Revenue rose 8% to Rs 27,525 crore.

  • Of the gross premiums, new business premium rose 8% while renewal premium increased 17%.

  • The 13th month persistency ratio—or customer retention—improved to 81.54% from 78.66%, while the 61st month persistency ratio rose to 52.79% from 44.24%.

  • Solvency ratio—which measures the extent to which assets cover commitments for future liabilities—rose to 2.19 from 2.12. The minimum regulatory requirement is 1.50.

  • SBI Life's overall cost ratio increased to 9.42% from 8.68%.

Half-Yearly Highlights

  • The after-tax profit rose 36% to Rs 640 crore.

  • Value of new business grew 53% to Rs 2,120 crore.

  • VNB margin expanded to 31% from 24.7%.

  • The embedded value rose 20% over last year at Rs 42,410 crore.

  • Annualised premium equivalent rose 22%.

  • Overall revenue fell 22% due to a decline in investment income.

  • Of gross written premiums, new business premium grew 27%, while renewal premium increased 16%.

  • Persistency ratio on premium basis improved across all cohorts.

  • Operating expense ratio improved by 20 basis points to 5.6%, while commission ratio rose to 4.5% from 3.6%. Thus, overall cost ratio was up at 10.2% from 9.5%.

  • Assets under management increased 16% to Rs 2.8 lakh crore.

  • Return on equity grew to 10.7% against 8.8% a year ago.

The company has set aside an additional reserve of Rs 290 crore towards Covid-19 pandemic, as of Sept. 30, 2022.

Shares of SBI Life ended the day's trading 2.21% higher compared with a 0.81% rise in the benchmark BSE Sensex.