SBI Life Insurance Q3 Results: Profit Falls, Misses Estimates

SBI Life Insurance Co.'s third-quarter profit declined year-on-year, missing estimates.

The private insurer's profit fell 16% year-on-year to Rs 304 crore in the quarter ended December, according to its exchange filing. That compares to the Rs 447-crore profit estimated by the Bloomberg consensus.

Sequentially, the bottom line contracted 19%.

However, the company earned a net premium of Rs 19,171 crore, a 6% increase over a year earlier.

SBI Life Q3 FY23 Highlights (YoY)

• Revenue rose 30% to Rs 26,627 crore. The consensus estimate was Rs 25,021 crore.

• Of the gross premiums, new business premium fell 1% while renewal premium—which contributed 56% of the total—increased 13%.

• The 13th month persistency ratio—or customer retention—improved to 80.53% from 79.21%, while the 61st month persistency ratio rose to 53.29% from 45.28%.

• Solvency ratio—which measures the extent to which assets cover commitments for future liabilities—rose to 2.25 from 2.09. The minimum regulatory requirement is 1.50.

• SBI Life's overall cost ratio increased to 9.1% from 7.7%.

Nine-Monthly Highlights

• The after-tax profit rose 13% to Rs 944 crore.

• Value of new business grew 44% to Rs 3,630 crore.

• VNB margin expanded to 29.6% from 24.8%.

• Annualised premium equivalent rose 20%.

• Persistency ratios for the 13th month improved to 84.55% from 83.87%, and for the 61st month, it rose to 53.59% from 48.68%.

• Operating expense ratio increased by 10 basis points to 5.2%, while commission ratio rose to 4.5% from 3.5%. Thus, overall cost ratio was up to 9.7% from 8.7%.

• Assets under management increased 17% to Rs 3 lakh crore.

• Return on equity grew to 10.4% against 10.3% a year ago.

• The share of par in the APE product mix remained at 5%, while that from non-par rose to 38% from 28%. Share of ULIP declined to 57%.

The company reported a growth in protection new business premium of 25% from Rs 2,040 crore in nine months of FY22 to Rs 2,550 crore in nine months of FY23 due to 12% growth in individual protection and 30% growth in group protection.

Shares of SBI Life ended 2.07% lower on Friday compared with a 0.39% decline in the benchmark BSE Sensex.