SBI Life Insurance Company Limited — Q2 FY26 earnings call

Call held 24 Oct 2025

Management summary

SBI Life reported a strong H1 FY26, marked by robust growth in new business premium, gross written premium, and Value of New Business, achieving a healthy VoNB margin of 27.8%. The company successfully navigated the initial impact of GST reforms through product mix adjustments and customer benefit pass-through. Management expressed confidence in continued growth in H2, driven by a strategic focus on protection-oriented solutions and a resurgence in key distribution channels, while maintaining strong solvency and a customer-first approach.

Highlights

  • New business premium grew 17% to INR 183.5 billion in H1 FY26.

  • Gross written premium increased 19% to INR 429 billion in H1 FY26.

  • Profit after tax grew 4% to INR 10.89 billion in H1 FY26.

  • Value of New Business (VoNB) grew 14% to INR 27.5 billion, with VoNB margin at 27.8% (a gain of 98 basis points) in H1 FY26.

  • Assets Under Management (AUM) reached INR 4.81 trillion, up 10% YoY, and Solvency Ratio stood at a healthy 1.94.

  • Protection segment APE grew 33% YoY, with individual pure protection up 143% on an APE basis.

  • 13th month persistency improved by 70 basis points to 87.11%.

Concerns

  • GST reform led to increased GST expenses and pressure on profitability, with an 80 basis point impact on H1 VoNB margins.

  • Opex ratio increased to 6.2% in H1 FY26 from 5.8% in H1 FY25.

  • Total cost ratio increased to 10.9% in H1 FY26 from 10.6% in H1 FY25.

Key financials

  1. New Business Premium 183.5 Bn +17%YoY
  2. Gross Written Premium 429 Bn +19%YoY
  3. Profit After Tax 10.89 Bn +4%YoY
  4. Value of New Business (VoNB) 27.5 Bn +14%YoY
  5. VoNB Margin 27.8%
  6. Embedded Value 760 Bn +15%YoY
  7. Assets Under Management (AUM) 4.81 Tn +10%YoY
  8. Solvency Ratio 1.94
  9. APE 99.2 Bn +10%YoY
  10. Individual APE 87.8 Bn +6%YoY
  11. 13th Month Persistency 87.1%
  12. Opex Ratio 6.2%
  13. Total Cost Ratio 10.9%

What they filed

Q1 FY27: revenue up 18.8%, net profit up 22.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue40,302 18,862 23,071 38,996 23,115 −43%46,133 +145%4,071 −82%46,337 +19%
EBITDA606 596 -449 664 516 −15%615 +3%-1,046 −133%757 +14%
Net profit529 551 814 594 495 −6%577 +5%805 −1%725 +22%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Product Mix (Individual APE basis)
    20% Guaranteed Non-Par Saving Products Share67 Bn Individual ULIP New Business55% Individual ULIP Share of Individual New Business11% Protection Business Share of APE10.6 Bn Protection Business APE3.7 Bn Individual Protection APE143% Individual Pure Protection APE Growth6.8 Bn Group Protection APE44% Group Protection APE Growth1.3 Bn Credit Life APE26% Credit Life APE Growth26% Non-Participating Products APE Growth57% Participating Products NBP Growth (Q2 vs Q1)
  • Distribution Mix (APE basis)
    57% Bancassurance (SBI & RRBs) Share of Total APE54.7 Bn Bancassurance (SBI & RRBs) Individual APE7% Bancassurance (SBI & RRBs) Individual APE Growth29% Other Banks (Non-SBI Group) Growth28.3 Bn Agency Individual Rated Premium14% Other Channels (Direct, Corporate Agents, Brokers, Online, Web Aggregators) Share of Total APE36% Other Channels Individual NBP Growth35% Non-Par Business through Other Channels APE Growth

Guidance & targets

Market Share

  • Protection share of APE Market Share · next 12 to 24 months · High confidence above 10%
    The company expects to increase its protection share to above 10% of APE, and it is in line with our H1 growth.

    — Management

Profitability

  • VoNB Margin (post GST impact) Profitability · H2 FY26 · Medium confidence similar level of margin (20-30 bps impact at most)
    in H2, our impact will be maybe able to maintain similar level of margin. Otherwise, might be 20 to 30 basis point impact might be happened, not more than that.

    — Management

  • VoNB Margin Profitability · Ongoing · High confidence 26% to 28%
    So, our guidance for the margin remains what we had given earlier in the range of 26% to 28%.

    — Management

Volume

  • Overall APE growth Volume · FY26 · High confidence 13% to 14%
    APE growth, as we have mentioned, it will be in the around 13% to 14%. And we are talking about individual APE for the overall for FY '26.

    — Management

  • Bancassurance and Agency channel growth Volume · Full year · Medium confidence mid-teens
    And on the same basis, we are expecting that we will be able to meet the guidance that we had provided for originally.

    — Management

What to watch in Q3 FY26

Protection share of APE

Next 12-24 months (check next quarter for progress)
Current 11%
Target Above 10%

Why it matters

Indicates strategic shift towards higher-margin protection business and its contribution to overall profitability.

The company expects to increase its protection share to above 10% of APE, and it is in line with our H1 growth.

Risks & concerns

  • Impact of GST reform on profitability

    medium

    Our financial performance reflects the transitional impact of revised GST rates on life insurance premiums, which led to increased GST expenses and some pressure on profitability. H1 VoNB margin was impacted by 80 bps, with a potential 174 bps impact for the full year if product mix doesn't change.

    Management acknowledged

  • Competitive landscape and aggressive pricing trends

    medium

    Amidst aggressive pricing trends across the industry, the company has remained disciplined, aligning its non-par saving product pricing with market yields.

    Management acknowledged

Q&A highlights

7 direct
Impact of protection business growth on EV unwind and earnings recognition Direct
See, as you know, the protection business is a high-margin business. So, if protection business keep growing, unwinding will happen. And I think protection is a long-term business. So, unwinding for the protection will be gradual in nature, and it will unwind over the longer period.

Addresses how the shift to higher-margin, longer-term protection products impacts immediate earnings vs. long-term value creation.

Asked by MW Kim

Clarification on GST impact on VNB margins and extrapolation for full year Direct
So if you see, we have clarified this total GST impact is 80 basis points for the H1. Out of that, the business written on 22nd and onwards has impact of only 20 basis points. So this 9 days business constitute around 11%, 11.5% precisely. So, if you extrapolate the impact for the margin, it will be 1.74%.

Provides granular detail on the GST impact, differentiating between business written before and after the rule change, and how the company plans to mitigate it.

Asked by Kushagra Goel

Potential for ULIP margin compression due to product mix and yield curve Direct
we don't expect there will be compression on the ULIP margin. In fact, we expect the ULIP margin slightly go up given the product that we launched has a longer premium paying term. And secondly, we have also introduced the rider attaching to those products.

Clarifies management's view on ULIP profitability despite market trends and internal product changes.

Asked by Avinash Singh

Headroom for growth in non-par products and strategy for product mix shift Direct
Our ask from our distributor is to not to deny ULIP sales, not to deny ULIP product to our customers, but at the same time, the focus for growth should be on the non-par and par products, which are margin accretive for the company also.

Reveals the company's strategic focus on margin-accretive non-par and par products while maintaining ULIP sales.

Asked by Swarnabha Mukherjee

Growth in banca and agency channels and expectations for H2 Direct
So our dominant channel are banca and agency channel. We keep reviewing our business strategies, our distribution strategies in line with the growth. And when we saw that up to the month of August, the expectations were not being met, we tweaked certain norms, and that has resulted in a very positive environment in the month of September. If you look at the individual September month numbers, the growth was around 15%.

Explains the recent underperformance in key channels and the corrective actions taken, with positive results seen in September and expected to continue.

Asked by Sanketh Godha

Online business growth drivers and counter share targets Partial
As far as the online business is concerned, it is coming almost solely from our own website and not from any partner. And we have been working on our side for quite some time. You will further see improvement in the tech that we are providing back-end tech, also the products that are getting offered.

Provides insight into the company's digital strategy and the source of online business growth, highlighting internal efforts over external partnerships, but lacks specific counter share targets.

Asked by Dipanjan Ghosh

Impact of GST on participating products and whether costs are passed to consumers Direct
What we say that we try to grow the participating business and our business composition you might be seeing is not 3% to 4%. We do have the existing book on that perspective. And when we price -- and we do the supportable bonus because if I compare to us to the other player, our commission rate and expenses were much lower.

Reassures that GST costs are not being passed to policyholders in participating products, emphasizing the company's customer-first approach and competitive cost structure.

Asked by Vinod Rajamani

Discrepancy in GST impact on EV vs. VNB Direct
See Nischint, I think it is not appropriate to compare the impact of EV to the new business, correct? Because EV has the existing book that have a different mix, and there is a significant profit coming from. Whereas if you look into the EV renewal new businesses that written there, the -- all the -- is a longer product because we're selling non-par and the longer tenure as compared to existing one.

Clarifies the difference in GST impact on the overall Embedded Value (existing book) versus Value of New Business (new sales), explaining why direct comparison is misleading.

Asked by Nischint Chawathe

2 min read 6 chapters

Detailed narrative

Strong H1 FY26 Performance Across Key Metrics

SBI Life delivered a robust H1 FY26, with new business premium growing 17% to INR 183.5 billion and gross written premium increasing 19% to INR 429 billion. Profit after tax rose 4% to INR 10.89 billion, while the Value of New Business (VoNB) expanded 14% to INR 27.5 billion, achieving a healthy VoNB margin of 27.8%, a 98 basis point gain. The company's embedded value stood at INR 760 billion, up 15%, and Assets Under Management reached INR 4.81 trillion, growing 10%.

Strategic Product Mix Shift Towards Protection

The company strategically shifted its product mix, with the protection segment showing robust performance, growing 33% year-on-year on an APE basis. Individual pure protection saw exceptional growth of 143% on an APE basis, contributing to the company's goal of increasing protection share to above 10% of APE. New products like Smart Shield Plus and Smart Money Back Plus were well-received, with Smart Shield Plus contributing 11% of total protection sum assured.

Navigating GST Reforms and Maintaining Margins

Management acknowledged the transitional impact of recent GST reforms, which led to increased GST expenses and some pressure on profitability, with an 80 basis point impact on H1 VoNB margins. However, the company passed the entire GST benefit to customers and enhanced product benefits. They expect product mix adjustments and operational efficiencies in H2 FY26 to largely absorb the remaining impact, aiming to maintain margins within the 26-28% range or limit impact to 20-30 bps.

Resurgence in Bancassurance and Agency Channels

After some underperformance until August, the company tweaked certain norms, leading to a positive environment in September, with individual September month numbers showing around 15% growth. Management expects this trend to continue in H2, enabling them to meet their full-year guidance for these dominant distribution channels. Bancassurance (SBI & RRBs) contributed 57% of total APE business, growing 7% on an individual APE basis, while other banks (non-SBI Group) grew 29%.

Focus on Digitalization and Customer-First Approach

SBI Life continues to leverage digitalization, with 99% of individual proposals submitted digitally and 59% processed through automated underwriting. The company emphasized its customer-first approach, maintaining a 99% death claim settlement ratio and a low mis-selling ratio of 0.02%. They also highlighted their commitment to not pass GST costs to policyholders in participating products, reinforcing their competitive cost structure.

Operational Efficiency and Solvency

The company's solvency ratio remained strong at 1.94, well above the regulatory requirement of 1.50, indicating robust financial health. While the opex ratio increased slightly to 6.2% and total cost ratio to 10.9% for H1 FY26, management stated this was in line with planned expansion, including opening 44 new branches and increasing employee count by over 3,500, contributing to the operating expenses.

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