SBI Life Insurance reports 4% y-o-y growth in Q4 net profit

29 Apr 2024 , 12:37 PM

SBI’s Profit after tax in the March quarter y-o-y by 4.4%  to Rs 8.11 Billion. SBI Life posted a decrease in its new business margin for the fiscal year ending on March 31, 2024. This was attributed to a rise in the proportion of low-margin products and changes in customer preferences. The value of new business (VNB), which represents the expected profit from new policies, increased by 9.5% to 55.50 Billion Rupees ($666.1 million). The VNB margin fell to 28.1% from 30.1% a year ago.

With a booming local equity market, life insurers’ proportion of low-margin unit-linked insurance plans (ULIPs) has increased. Analysts believe this has had a significant impact on insurers’ VNB margins.

According to SBI Life, the ULIP market accounts for 60% of its overall product mix in terms of annualised premium equivalent (APE). The share was 55% a year ago.

SBI Life has the biggest ULIP share among its peers, but analysts believe the company’s low-cost structure allows it to better cushion its margins.

SBI Life’s net premium income increased 26% to 251.16 Billion Rupees in the three months ended March 31. Meanwhile, investment income increased more than ninefold to 108.12 Billion Rupees.

SBI Life Insurance Company Limited is an Indian life insurance company founded as a joint venture between the State Bank of India (SBI) and the French financial organisation BNP Paribas Cardif. SBI holds a 55.50% stake in the business, while BNP Paribas Cardif owns 0.22%.

At around 12.31 PM, SBI Life Insurance was trading 0.30% higher at ₹1,419.55 per piece, against the previous close of ₹1,415.25 on NSE. The counter touched an intraday high and low of ₹1,460.90, and ₹1,416, respectively.

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