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Informist, Thursday, Apr. 24, 2025

By Priyasmita Dutta and Cassandra Carvalho

NEW DELHI – SBI Life Insurance aims to maintain its value of new business margin "barring spikes and dips" at around 27-28% in 2025-26 (Apr-Mar), even as the company is reorienting its product mix, the life insurer's management said in a post-earnings analyst call. The value of new business rose 7% to INR 59.5 billion in the year gone by, with the value of new business margin at 27.8%, marginally lower than 28.1% in FY24.

The bank's senior management said that as part of the changes in the product mix, some of the products will shift towards participating policies which have steady margins and that would offset any risk of higher margin from those flowing into non-linked products. 

The management said that in FY26, the life insurer will make a shift towards traditional products by 500 basis points from unit-linked products, taking the ratio of traditional products to unit-linked products to 65:35 from 70:30 at the end of FY25. "Customers have evolving demands, we are committed to modifying them based on consumer demands and market conditions," SBI Life's senior management said. 

The life insurer announced its financial results for Jan-Mar on Thursday. Its net profit was flat on year at INR 8.14 billion, with both total income and expenditure down more than a third and the net premium income down 5%. Shares of SBI Life ended 0.5% lower on Thursday at INR 1,608.20 on the National Stock Exchange. The company announced its earnings just minutes before the end of trade.

In the year gone by, there were some headwinds in the group savings business, the management said. It saw a fall of 47% on year in FY25. 

For FY26, the life insurer is focussed on policy distribution and product development to boost growth. SBI Life's management projected this year's annualised premium equivalent to grow 13-14% on year, higher than the industry-wide growth of 12%. Its FY26 growth plans are largely dependent on its agency channel, which is expected to grow 25%. As of March-end, agency made up 28% of the channel mix, and grew 21% on year. To further support agents and the growth of this vertical, the company aims to open over 85 branches this fiscal year, the management added. 

On growth, the management said it expects the bancassurance business to grow 10% in FY26, higher than the 8% growth seen in the previous year. Bancassurance is their leading distribution channel, with a 61% share in the channel mix.

The life insurer also said that this year, it does not see much impact of interest rate cuts by the Reserve Bank of India on non-participating savings margins. Returns on non-par plans are correlated to returns on government securities. 

At a time when the central bank, along with the finance minister, has been flagging the issue of mis-selling by insurance companies, SBI Life's top management said its mis-selling ratio was one of the lowest in the industry at 0.02%.  End

Edited by Avishek Dutta

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