SBI Life Insurance Q3 results update!
Last updated: 22 Jan, 2021 | 10:51 am
- Profit declines due to higher provisions: SBI Life Insurance Company reported a 40.2% on-year decline in net profit to ₹232.85 crore in the quarter ended December 20, mainly impacted due to higher actuarial provisioning. Analysts had earlier estimated a profit of about ₹390 crore. Net premium income rose 17.7% on-year to ₹13,767 crore, as COVID pandemic drove demand for insurance services.
- Impact of Covid-19: SBI Life Insurance said that it has assessed the overall impact of Covid-19 on its business and financials, policy liabilities and solvency for the quarter. Based on the evaluation, the company has kept an additional reserve of Rs 70.38 crore for COVID-19 pandemic over and above the policy level liabilities calculated based on prescribed IRDAI regulations.
- Market Share: SBI Life gained significant market share on NBP (New Business Premium) basis post initial lockdown. The company retained private market leadership in New Business Premium with 24.5% market share and in Individual Rated Premium (IRP) with 23.4% market share.
- AUM (Assets Under Management) : During the quarter, the AUM of SBI Life crossed the ₹2 lakh crore mark making it the second-largest in terms of AUM after LIC.
- Operational Metrics: Value of New Business decreased by 2% on-year to ₹1,450 crore in 9MFY21. New business margin increased 100 bps to 19.3%. Persistency ratio (a measure of how long a customer continues with their policy) stood at 86.17%.
SBI Life has seen a strong growth in premium income and investment income in Q3FY21, leading to a healthy topline rise. However, the company has seen higher actuarial provisioning for the quarter. The actuarial provisioning is done based on an estimate provided by the professional actuaries. The ongoing pandemic could have resulted in an increase in these estimates. This rise in provisions has also impacted the profit margins. With its strong bancassurance franchise, SBI Life is well-placed to take advantage of the growing demand for life insurance in these difficult times.