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%.
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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.
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