SBI Life Insurance Company Limited — Q4 FY25 earnings call

Call held 24 Apr 2025

Management summary

SBI Life delivered strong FY25 results marking its 25th year of operations, with PAT growing 27% and embedded value crossing INR 700 billion. The company maintained private market leadership while executing a deliberate product mix shift toward non-ULIP products in Q4. Agency channel grew 28% for the year but decelerated to 4% in Q4 as focus shifted to non-ULIP products. VoNB margin expanded 220bps YoY in Q4 to 30.5% driven by favorable product mix change. Management guided for 13-14% IRP growth in FY26 with agency at ~25% and banca at ~10%.

Highlights

  • New business premium of INR 355.8 billion; maintained private market leadership with 20.8% share

  • Individual new business premium of INR 263.6 billion, up 11% YoY; private market share of 25.3%

  • Profit after tax of INR 24.13 billion, strong growth of 27% YoY

  • VoNB of INR 59.5 billion; VoNB margin at 27.8% (vs 28.1% prior year); Q4 VoNB margin at 30.5% (+220bps YoY)

  • Embedded value of INR 702.5 billion, growth of 21% over March 2024

  • AUM of INR 4.48 trillion, growth of 15% YoY

  • Agency channel individual NBP grew 28% YoY (but Q4 growth just 4%); 70 new branches opened

  • 13th month persistency improved 63bps to 87.41%; 61st month improved 528bps to 62.69%

Key financials

  1. New Business Premium ₹355.8 Bn
  2. Individual New Business Premium ₹263.6 Bn +11%YoY
  3. Gross Written Premium ₹849.9 Bn +4%YoY
  4. Profit After Tax ₹24.13 Bn +27%YoY
  5. Value of New Business ₹59.5 Bn +7%YoY
  6. VoNB Margin 27.8%
  7. Embedded Value ₹702.5 Bn +21%YoY
  8. AUM ₹4.48 Tn +15%YoY
  9. Individual Rated New Business Premium ₹193.5 Bn +12%YoY
  10. Renewal Premium ₹494.1 Bn +14%YoY
  11. Solvency Ratio 1.96×
  12. Individual APE ₹195.9 Bn +13%YoY

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

  • ULIP
    ₹162 Bn Individual ULIP NBP18% YoY Growth62% Share of Individual NBP
  • Non-Par Savings
    20% Individual APE Share18% NBP Growth
  • Protection
    ₹7.9 Bn Individual Protection NBP₹33 Bn Group Protection NBP₹25.2 Bn Credit Life NBP₹20.5 Bn Protection APE
  • Bancassurance
    ₹127.5 Bn Individual APE9% YoY Growth61% Share of Total APE
  • Agency
    ₹59.5 Bn Individual APE23% YoY Growth30% Share of IRP

Guidance & targets

Growth

  • Individual IRP growth FY26 Growth · FY26 · High confidence 13-14%
    we expect that we will continue to grow at around 13% to 14%, which will be slightly above the industry growth

    — Amit Jhingran

  • Agency channel growth FY26 Growth · FY26 · Medium confidence ~25%
    growth from agency channel, we are again expecting at around 25% on this strong base

    — Amit Jhingran

  • Banca channel growth FY26 Growth · FY26 · Medium confidence ~10% or low double digits
    going forward, we will be growing at around 10% or in low double digits in the banca channel

    — Amit Jhingran

Profitability

  • VoNB margin guidance FY26 Profitability · FY26 · High confidence ~28%
    Around 28% of margin

    — Amit Jhingran

Product Mix

  • ULIP vs Traditional split target FY26 Product Mix · FY26 · Medium confidence 65% ULIP, 35% Traditional (on IRP basis)

    From 70-30 in FY25 today

    we are expecting that it will go towards 65%-35% in FY '26

    — Management

Risks & concerns

  • Agency growth deceleration in Q4 to 4% from 28% for 9 months

    medium

    Large agent deletions (net addition marginally negative) due to de-weeding of inactive agents; conscious product mix shift also impacted growth

    Analyst acknowledged

  • Group savings business headwinds from unsustainable competitor pricing

    medium

    Group NBP at INR 92.2 billion with muted contribution due to hyper-competition in group savings

    Management acknowledged

  • VoNB margin dilution from higher ULIP share (70% vs target 65%)

    low

    FY25 VoNB margin at 27.8% vs 28.1% prior year; shift toward ULIP partly offset by product-level margin improvements

    Analyst acknowledged

  • Solvency ratio decline to 1.96 from 2.04 due to higher non-par and protection business capital requirements

    low

    Management explained decline is business-as-usual from dividend payout and higher solvency requirements for non-linked products

    Analyst acknowledged

Areas of evasion (2)

  • Channel-wise VoNB margins not disclosed
  • Specific IRR rates not shared

Q&A highlights

3 direct
Growth outlook and agency Q4 slowdown Direct
agency channel was somewhat affected, but there was substantial growth in contribution of non-ULIP products from the agency channel

Clarified that Q4 agency slowdown (4% vs 28% for year) was a deliberate product mix shift toward non-ULIP, not structural weakness

Asked by Avinash Singh

VoNB margin sustainability with product mix shift Direct
barring spikes or dips from quarter-to-quarter, we expect to maintain the margin of around 27%-28% for the full year

Despite planned 5% shift from ULIP to traditional (which has higher margins), management maintains 28% guidance due to offsetting shifts toward par products

Asked by Prayesh Jain

Banca regulatory risks and channel dynamics Direct
this talk on banca channel, I have been listening from either the journalists or the analysts, but not from any of the IRDA authority or from the government authorities

Management firmly denied any formal regulatory discussions on banca restrictions, providing confidence on channel stability

Asked by Shreya Shivani

2 min read 4 chapters

Detailed narrative

Premium Growth and Market Leadership

SBI Life maintained private market leadership with 20.8% NBP share and 25.3% individual NBP share. Individual NBP grew 11% to INR 263.6 billion, with Q4 growing 7% vs industry 5%. The 3-year CAGR of individual rated premium stands at 15% vs industry 11%. Four new non-ULIP products (Smart Platina Supreme, Smart Bachat Plus, Smart Platina Young Achiever, Smart Future Star) sold over 1.5 lakh policies and collected INR 1,100+ crores.

Product Mix Shift and Margin Dynamics

FY25 product mix was 70% ULIP and 30% traditional on IRP basis, with management targeting 65-35 in FY26. Q4 VoNB margin jumped to 30.5%, up 220bps YoY, driven by favorable product mix shift toward non-ULIP. Protection mix shifted from 90-10 ROP-to-pure-term to 80-20, which is margin accretive. Rider attachment rates are increasing with new riders launched, further boosting product-level margins. Non-par savings grew 18% for the year and 56% in Q4.

Agency Channel Transformation

Agency individual APE grew 23% YoY to INR 59.5 billion, contributing 27% share (up from prior levels). Agent productivity improved 20% to INR 2.9 lakhs on individual NBP terms. 70 new branches opened targeting Tier 3 and 4 regions. However, net agent addition was marginally negative for the year as inactive agents were de-weeded (97,500 gross additions offset by deletions). Agency share in IRP rose from 28% to 30%. Management targets 25% agency growth and 87 new branches in FY26.

Operational Excellence and EV Growth

Embedded value grew 21% to INR 702.5 billion with operating ROEV of 20.2%. Operating variance of INR 727 crores was driven by INR 423 crores from mortality, INR 277 crores from persistency, and INR 17 crores from expenses. 13th month persistency improved 63bps to 87.41% and 61st month improved a significant 528bps to 62.69%. Death claim settlement ratio reached 99.4%. Opex ratio at 5.3% and total cost ratio at 9.7% remain controlled.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls