SBI Life’s third-quarter net profit has seen a significant surge of 71% year-over-year, reaching Rs 551 crore, surpassing expectations. Additionally, the company’s premium income has increased by 11%.
SBI Life Insurance announced on January 17 that its net profit for the third quarter of FY25 had surged by an impressive 71 percent to Rs 550.82 crore, up from Rs 321.75 crore in the same quarter of the previous fiscal year. This exceeded the expectations of most brokerage firms, as a Moneycontrol poll had predicted a net profit range of Rs 400-500 crore for the October-December period.
The company’s net premium income for Q3 FY25 reached Rs 24,828 crore, marking an 11 percent year-on-year growth compared to the Rs 22,326 crore reported in Q3 FY24. This growth was primarily fueled by a 14 percent increase in first-year premiums, totaling Rs 1,446.76 crore during the quarter. SBI Life maintained a strong solvency ratio of 2.04, well above the regulatory requirement of 1.50.
In terms of profitability, the company’s annualized premium equivalent (APE) for the quarter was Rs 6,940 crore, reflecting a 13.2 percent year-on-year growth, surpassing the 6.5 percent growth estimated by brokerages. The Value of New Business (VNB) for Q3 FY25 was reported at Rs 1,870 crore, an 11 percent increase from the previous year, with a VNB margin of 27.4 percent.
For the nine-month period ending December 31, 2024, SBI Life reported an APE of Rs 15,970 crore, an 11 percent increase from the same period in the previous year. The VoNB during this period rose by 6 percent year-on-year to Rs 4,290 crore, with a VoNB margin of 26.9 percent, slightly lower than the 28.1 percent recorded in the corresponding period of FY24.
The company experienced significant growth in persistency ratios, particularly at the 13th and 61st month levels, which improved by 83 and 521 basis points (bps) year-on-year, respectively. This demonstrates SBI Life’s strong focus on customer retention and the quality of its business.
Assets under management (AUM) increased by 19 percent year-on-year to Rs 4.42 lakh crore as of December 31, 2024, with a debt-to-equity mix of 61:39. Notably, 94 percent of its debt investments are in AAA and sovereign instruments.
In the distribution segment, the bancassurance channel remained a significant contributor, representing 63 percent of the APE in the first nine months of FY 25. The agency channel also performed well, capturing a 28 percent share, while other channels, including brokers and direct business, contributed 9 percent. SBI Life boasts a vast network of over 309,590 insurance professionals and 1,086 offices across India.
Following the announcement of the results, SBI Life’s share price rose to Rs 1,539 on NSE, marking a 1.7 percent increase from the previous close.
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