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Informist, Thursday, Jul. 24, 2025

By Siddhi Chauhan and J. Navya Sruthi

MUMBAI – SBI Life Insurance Co. remains confident of achieving its value-of-new-business margin of 26-28% for the financial year 2025-26 (Apr-Mar), the life insurer's senior management said in a post-earnings call with analysts Thursday. The company's value of new business rose 12% on year to INR 10.9 billion in the June quarter. The value-of-new-business margin was 27.4% in Apr-Jun, up from 26.8% last year.

"We continue to stick to our earlier guidance of 26-28% and you would have noticed that all along we have been in this range and we are sticking to our margin guidance with some positive bias," the senior management said. 

The affirmation came even as SBI Life is in the process of shifting its product mix to traditional products from unit-linked products. In the June quarter, unit-linked insurance plans constituted 57% of the company's annualised premium equivalent channel mix, the company said in its investor presentation. This was followed by non-participating products, which constituted 38%, and participating policy products, which contributed 5% of the annualised premium equivalent channel mix.

As in the March quarter, the senior management said it wants to bring down the share of unit-linked insurance plans. "We want to move to a healthier product mix," it said. "By healthier, (we) mean which provides a good set of margin numbers also for the company. ...There is a 2% reduction in ULIP in the banca (bancassurance) channel also and we want to bring it further down by improving our non-par and protection business in banca further. And I'm sure that in the remaining three quarters, we will be able to align the banca product mix also as per our expectation and as per our guidance set for the year."

Asked about growth in the group term insurance and credit life insurance segments, the senior management said it expects growth in the credit life insurance segment but sees growth in the former being "lumpy". 

The company added more than 31,000 agents on a gross basis during the June quarter, the senior management said. "We have opened 36 new branches this year," it said. This expansion is aligned with the company's vision of creating infrastructure that supports the long-term development of its agency channel, he said.

Despite lower growth in the agency channel, the company's management said it continues to be bullish on it. In the June quarter, the annualised premium equivalent of the agency channel was 27%, compared with 30% a year ago.

Asked about the Insurance Regulatory and Development Authority of India limiting business through the bancassurance channel, the SBI Life Insurance management said it had not heard from the regulator. "We have consistently been saying that from the regulator's side, there has been no formal indication for anything like that," the management said. "And that is why the growth (in bancassurance) was on a continuous basis... there will not be any effect on the guidance that we (have) provided and we stick to the kind of guidance of my team's growth on overall basis in the current financial year."

SBI Life's net profit for the June quarter grew moderately on year on the back of a rise in income from investments and net premium income. However, a sharp sequential fall in net premium income and gross premium income resulted in the net profit declining on quarter. The life insurance company posted a net profit of INR 5.94 billion in Apr-Jun, up 14.4% on year but down 26.9% on quarter. The company's net income from investments rose nearly 12% on year to INR 215.25 billion. Shares of SBI Life Insurance Co. closed 0.9% lower at INR 1,793.60 on the National Stock Exchange Thursday.  End

Edited by Rajeev Pai

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