SBI Life Insurance Company Q3FY22 Preview: VNB seen at Rs 10.2 billion, VNB margin at 22.5%

20 Jan 2022 , 08:36 AM

Result date: 21st January, 2022
Recommendation: Buy
Target price: Rs. 1,600
(Source: IIFL Research)

SBI Life Insurance Company’s well-diversified geographical reach and strong distribution network are likely to drive healthy premium growth across segments. Its agency, as well as bancassurance channels, are performing well. SBI Life’s strategy of focusing on protection protects at a time when other larger players de-focus on it temporarily seems to be working well. Continued traction in non-PAR savings and protection products, recovery in ULIPs augur well for the company.

SBI Life maintains its cost leadership among peers and is likely to witness the highest growth in VNB relative to other large listed peers.

Important management insights to watch out for:

– COVID related claims
– Outlook on profitability

Rs. Billion	December 2021 estimates	YoY change
New business premium	85.0	56%
Renewal premium	94.5	12%
Total APE	45.2	29%
Savings APE	40.0	26%
Protection APE	5.2	57%
VNB	10.2	45%
VNB margin	22.5%	250 bps

Source: Company, IIFL Research