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SBI Life Insurance Company spurts on good Q1 outcome

SBI Life Insurance Company spurts on good Q1 outcome

SBI Life Insurance Company gained 8.68% to Rs 1,294 after the company’s net profit rose 17.8% to Rs 262.85 crore from Rs 223.16 crore in Q1 FY23 over Q1 FY22.The company reported a negative income from investment of Rs 6,405.66 crore in Q1 FY23 as against an income from investment of Rs 7,409.91 crore posted in Q1 FY22.
Net premium income jumped 32.76% to Rs 11,036.02 crore in Q1 FY23 as compared to Rs 8,312.55 crore in Q1 FY22. Profit before tax (PBT) grew 14.6% YoY to Rs 267.42 crore in the quarter ended 30 June 2022.

SBI Life Insurance Company has maintained its leadership position in Individual Rated Premium (IRP) of Rs 2,580 crore with 24.0% private market share in Q1 FY23. The Individual New Business Premium grew 87% YoY to Rs 3,430 crore in Q1 FY23. New Business Premium (NBP) jumped 67% YoY to Rs 5,590 crore in Q1 FY23 driven by strong growth in regular premium business by 83%.

Protection New Business Premium has increased by 63% from Rs 430 crore in Q1 FY22 to Rs 700 crore in Q1 FY23 due to growth in individual protection business by 55% to Rs 200 crore and growth in group protection business by 66% to Rs 500 crore in Q1 FY23. Gross Written Premium (GWP) has risen by 35% to Rs 11,350 billion in Q1 FY23 mainly due to 83% growth in First Year Premium (FYP) and 14% growth in Renewal Premium (RP) in Q1 FY23.

The company has a distribution network of 222,957 trained insurance professionals consisting of agents, CIFs and SPs along with widespread operations with 970 offices across country. The firm also has a distribution network comprising of strong bancassurance channel, agency channel and others comprising of corporate agents, brokers, micro agents, common service centers, insurance marketing firms, web aggregators and direct business.

APE channel mix for Q1 FY23 is bancassurance channel 63%, agency channel 26% & other channels 11%. NBP of Agency channel has increased by 50% to Rs 940 crore in Q1 FY23 and NBP of Banca channel has increased by 94% to Rs 2,900 crore in Q1 FY23 as compared to same period last year.

Value of New Business (VoNB) increased by 130% YoY to Rs 880 crore for Q1 FY23. VoNB margin has also improved by 665 bps to 30.4% in Q1 FY23. SBI Life Insurance Company has an additional reserve of Rs 290 crore towards COVID-19 pandemic as on 30 June 2022.

Its 13th month persistency (based on premium considering single premium and fully paid-up policies & group business where persistency is measurable) stood at 88.71% in Q1 FY23 as against 88.37% in Q1 FY22. The company’s strong growth in 25th and 49th month persistency (based on premium considering regular premium/ limited premium payment under individual category) improved by 339 bps to 78.72% and by 403 bps to 70.32% in Q1 FY23, on account of its focus on improving the quality of business and customer retention.

Asset under Management (AuM) grew by 13% from Rs 2,31,560 crore as on 30 June 2021 to Rs 2,62,350 crore as on 30 June 2022 with debt-equity mix of 73:27. Over 97% of the debt investments are in AAA and Sovereign instruments, the company stated in its press release.

The company’s net worth increased by 11% to Rs 11,760 crore as on 30 June 2022 from Rs 10,580 crore as on 30 June 2021. Robust solvency ratio as on 30 June 2022 was at 2.21 as against the regulatory requirement of 1.50.

SBI Life Insurance Company is one of the leading life Insurance companies in India. SBI Life Insurance Company has a strong distribution network of 222,957 trained insurance professionals consisting of agents, CIFs and SPs along with widespread operations with 970 offices across country. The company has diversified distribution network comprising of strong bancassurance channel, agency channel and others comprising of corporate agents, brokers, micro agents, common service centers, insurance marketing firms, web aggregators and direct business.
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نوشته‌شده در

LIC gains 2% market share in new business premium in April-June quarter

LIC gains 2% market share in new business premium in April-June quarter

Life Insurance Corporation (LIC) has gained over 200-basis points (bps) market share in new business premium (NBP) during the April-June quarter of FY23.

According to Insurance Regulatory and Development Authority of India (Irdai) data, at the end of the June quarter, LIC’s market share in NBP stood at 65.42 per cent, compared to 63.25 per cent at the end of FY22.

However, its market share is still below the FY21 and FY20 levels. In FY21, LIC’s NBP market share was 66 per cent, while in FY20, it was 69 per cent.

NBP is the premium acquired from new policies for a particular year.

LIC remains the most dominant player in the life insurance industry for over 20 years.

However, LIC does not enjoy a similar market share on an annualised premium equivalent (APE) basis.

In FY22, LIC’s market share was 46 per cent in APE terms. It stood at 49 per cent in FY21 and 59 per cent in FY20.

LIC has a high share of single premium products due to its large group business. In fact, single premiums constitute over 70 per cent of its NBP. For private sector players, it is 20-30 per cent of their NBP.

Covid-related disruptions posed distribution challenges for LIC initially, given it has always been an agency-driven institution.

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However, it quickly invested in its digital infrastructure and managed to get its distribution network back on track.

LIC had been losing ground to private players because of diversifying its portfolio mix. Now, LIC is also looking to diversify its product mix and reduce reliance on par products.

It is looking to introduce more non-par products in the market.

On an APE basis, non-par is about 7 per cent of LIC’s portfolio and it plans to take it up to 12-15 per cent in 3-4 years. LIC is also looking to diversify its distribution strategy by focusing more on the bancassurance channel.

Currently, around 3-3.5 per cent of its business comes from the bancassurance route.

In the next five years, it wants bancassurance to contribute at least 15 per cent to the business. An email sent to LIC did not elicit a response.

In an interview to Business Standard last month, LIC chairperson MR Kumar had said, “LIC is a very large institution and we have come out of every tough situation stronger. In fact, post Covid recovery is a sign of our resilience and I hope the current rise in Covid does not really disrupt the way the first two waves did. We are confident that we will be able to retain the market share of 60-65 per cent that we have been able to achieve over a period of time.”

LIC’s shares closed at Rs 708.05 a piece on the BSE on Friday, up 1.42 per cent from the previous day’s close.

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نوشته‌شده در

Is LIC IPO bad news for other insurance stocks?

Is LIC IPO bad news for other insurance stocks?

Next month’s mammoth stock market debut for India’s Life Insurance Corporation (LIC) has battered shares in other insurers as investors trim their holdings to make room for the state-owned giant, fund managers and analysts said.

The flotation, potentially raising $8 billion, likely will continue to drag on LIC’s competitors for about a year and could spread to other sectors, they said.

The government filed draft papers on Sunday with India’s market regulator to sell 5% of the company’s shares in what could be the world’s third-biggest insurance IPO ever and one of this year’s biggest Asian share sales, according to Refinitiv data.

“This is the biggest one and you have to make space for this,” said a fund manager who asked not to be named. “Historically, market leaders are the first ones that list. This is a rare moment when a large player is being listed very late.”

The 66-year-old company, dominating India’s insurance industry with more than 280 million policies, is the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available. It had 39.56 trillion rupees ($527 billion) of assets under management as of September.

“For any fund manager, having a player that owns over 60% of the market share instead of individually owning those that have 10%-11% market share is a very natural aspiration,” said Vidya Bala, co-founder of PrimeInvestor, a stocks and mutual funds research firm.

Fund managers have already started reducing their exposure to the three listed private life insurers, the fund manager and Bala said.

Shares in ICICI Pru have dropped 10.4% this year, while HDFC Life is down 9.7% and SBI Life 6.2%, compared with a marginal 0.2% decline in the blue-chip Nifty 50 index for the period.

LIC’s listing could dump the equivalent of nearly 60% of the three insurers’ free-float capitalisation on the market, Macquarie said in a report this week, adding that the outlook for them remains challenging.

If LIC’s valuation is attractive, the pressure could spread beyond insurers, weighing on consumer goods firms and some non-banking financial companies, two fund managers said.

“When IPOs of this big size come, they suck out the liquidity from the system,” one of the fund managers said. “If there’s room full of people at a party and a big guy comes in, you have to create space for him.”

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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