SBI Life Q2 Results: Profit Rises, But Misses Estimates

SBI Life Insurance Co.'s second-quarter profit rose around 1%, but it missed analysts' estimates. The company's value of new business margin fell over last year.

The private insurer's net profit rose 0.9% year-on-year to Rs 380 crore in the quarter ended September, according to an exchange filing on Friday. That compares with the Rs 443 crore consensus estimate of analysts tracked by Bloomberg.

Sequentially, the bottom line remained almost unchanged.

The company earned a net premium of Rs 20,050 crore, a 22% increase over a year earlier.

• Revenue rose 4% to Rs 28,569 crore (Bloomberg estimate: Rs 23,344 crore).

• Value of new business—the present value of future profit associated with new business written during the period—rose 20% to Rs 1,490 crore.

• VNB margin declined to 28.49% from 31.55%.

• Annualised premium equivalent rose 33%.

• The 13th-month persistency ratio—or customer retention—grew 178 basis points to 83.32%, and improved for the 61st month to 56.10% from 52.79%.

• Solvency ratio—which measures the extent to which assets cover commitments for future liabilities—fell to 212% from 219%. The minimum regulatory requirement is 150%.

Other Highlights For H1 FY24

• Operating expense ratio was at 5.4% versus 5.6%, while the commission ratio was at 4.6% versus 4.5%. The overall cost ratio fell by 20 basis points to 10%.

• Return on equity grew to 11.3% from 10.7% a year ago.

• The share of par in the APE product mix was 5%, down from 6% and non-par fell to 39% from 45%. The share of the unit-linked insurance plan increased to 56% from 49%.

• Annuity grew 27% over last year. Protection new business premium rose 25%, with 34% growth in group protection.

• Assets under management increased 22% to around Rs 3.5 lakh crore.

Shares of SBI Life were trading 0.44% lower at Rs 1,300.40, after the results were announced, as compared with a 1.06% rise in the benchmark Sensex at 3:02 p.m. on Friday.