Key measures of performance
(` in billion)
Particulars | H1 FY 2021 | H1 FY 2020 | YoY |
Revenue Parameters | |||
New Business Premium (NBP) | 90.0 | 78.2 | 15% |
Renewal Premium (RP) | 117.3 | 91.2 | 29% |
Gross Written Premium (GWP) | 207.3 | 169.4 | 22% |
Individual New Business Premium | 42.1 | 48.5 | -13% |
Individual Rated Premium (IRP) | 33.2 | 41.8 | -20% |
New Business Annualized Premium Equivalent (APE) | 39.8 | 46.7 | -15% |
Total Protection NBP (Individual + Group) | 9.1 | 9.3 | -2% |
Total Protection NBP Share | 10.1% | 11.9% | – |
Private Market Share based on IRP 1 | 20.7% | 23.1% | – |
NBP Product mix (%) (Par/Non Par/ULIP) | 4/65/31 | 7/50/43 | – |
NBP Channel mix (%) (Banca/Agency/others) | 49/13/38 | 57/18/25 | – |
Financial Parameters | |||
Profit after Tax (PAT) | 6.9 | 5.0 | 38% |
Net Worth | 96.6 | 80.7 | 20% |
Assets under Management (AuM) | 1,863.6 | 1,547.6 | 20% |
IEV, VoNB and VoNB Margin | |||
Indian Embedded Value (IEV) 2 | 298.6 | 246.9 | 21% |
Value of New Business (VoNB) 2 | 7.5 | 8.5 | -12% |
New Business Margin (VoNB Margin) 2 | 18.8% | 18.1% | – |
IEV, VoNB and VoNB Margin using effective tax rate6 | |||
Indian Embedded Value (IEV) 2 | 312.7 | 261.5 | 20% |
Value of New Business (VoNB) 2 | 8.0 | 9.4 | -15% |
New Business Margin (VoNB Margin) 2 | 20.2% | 20.2% | – |
Key Financial Ratios | |||
Operating expense ratio 3 | 5.4% | 6.4% | – |
Commission ratio | 3.2% | 4.0% | – |
Total cost ratio4 | 8.6% | 10.4% | – |
Persistency Ratios (based on premium) 5 | |||
13th month persistency | 85.92% | 85.81% | – |
25th month persistency | 78.83% | 77.36% | – |
37th month persistency | 72.12% | 71.01% | – |
49th month persistency | 66.27% | 67.94% | – |
61st month persistency | 60.87% | 57.48% | – |
Solvency Ratio | 2.45 | 2.20 | – |
Return on Equity (RoE) | 15.0% | 12.8% | – |
- Source: Life insurance council
- IEV, VoNB and VoNB margin for H1 FY21 and H1 FY20 have been reviewed by Independent Actuary
- Operating expense ratio = Operating expenses / Gross Written Premium (GWP)
- Total cost ratio = (Operating expenses + Commission + Provision for doubtful debt and bad debt written off) /GWP
- The persistency ratios are calculated as per IRDA/ACT/CIR/MISC/035/01/2014 circular dated 23rd January 2014. Single Premium and Fully Paid-Up policies are considered in above calculation. Group Business where persistency is measurable is included. Persistency Ratios for the period ended September 30, 2020 and September 30, 2019 are ‘Up to the Quarter’ Persistency Ratios are calculated using policies issued in September to August period of the relevant years.
- Effective tax rate assumes that a proportion of the projected profits are tax exempt on account of tax deductions available on income from dividends and tax free bonds.
N.B: Refer the section on definitions, abbreviations and explanatory notes
The Board of Directors of SBI Life Insurance Company Limited approved and adopted its audited financial results for the quarter and half year ended September 30, 2020, following its meeting on Monday, October 26, 2020 in Mumbai. The disclosure of financial results submitted to exchanges is annexed to this release.
Business growth and market share
- New Business Premium (NBP) has increased by 15% from ` 78.2 billion in H1 FY 2020 to ` 90.0 billion in H1 FY 2021.
- The Company has achieved market leadership in Total NBP of ` 90.0 billion with 24.5% private market share in H1 FY 2021.
- NBP from Non- par segment has increased by 51% to ` 58.9 billion in H1 FY 2021.
- Increase in GWP by 22% to ` 207.3 billion in H1 FY 2021 mainly due to strong growth in RP by 29% from ` 91.2 billion in H1 FY 2020 to ` 117.3 billion H1 FY 2021.
Cost Efficiency
- Total Cost ratio has decreased to 8.6% in H1 FY 2021, from 10.4% in H1 FY 2020.
- Commission ratio has decreased to 3.2% in H1 FY 2021, from 4.0% in H1 FY 2020.
- Operating Expense has decreased to 5.4% in H1 FY 2021, from 6.4% in H1 FY 2020.
Profitability
- Value of New Business (VoNB) decreased by 12% to ` 7.5 billion in H1 FY 2021.
- VoNB margin increased by 70 bps from 18.1% in H1 FY2020 to 18.8% in H1 FY 2021.
- Value of New Business (VoNB) decreased by 15% to ` 8.0 billion for H1 FY2021 (with effective tax rate).
- Profit after Tax (PAT) grew by 38% in H1 FY2021 to `6.9 billion from `5.0 billion in H1 FY 2020.
Persistency
- Strong 25th month persistency of 78.83% in H1 FY 2021 as compared to 77.36% in H1 FY 2020.
- 61st month persistency has improved to 60.87% in H1 FY 2021 as compared to 57.48% in H1 FY 2020.
Assets under Management
AuM has grown by 20% from ` 1,547.6 billion as on September 30, 2019 to ` 1,863.6 billion as on September 30, 2020 with debt-equity mix of 76:24. 90% of the debt investments are in AAA and Sovereign instruments.
Financial position
- The Company’s net worth increased by 20% from ` 80.7 billion as on September 30, 2019 to ` 96.6 billion as on September 30, 2020.
- Indian Embedded Value (IEV) increased by 21% from ` 246.9 billion as on September 30, 2019 to ` 298.6 billion as on September 30, 2020.
- The solvency ratio as on September 30, 2020 was at 2.45 as against the regulatory requirement of 1.50.
Distribution network
- The Company has strong distribution network of 207,520 trained insurance professional and widespread operations with 947 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. NBP channel mix for H1 FY 2021 is bancassurance channel 49%, agency channel 13%, and other channels 38%.
Definitions, abbreviations and explanatory notes
- New Business Premium (NBP): Insurance premium that is due in the first policy year of a life insurance contract or a single lump sum payment from the policyholder
- New Business Annualized Premium Equivalent (APE): The sum of annualized first year premiums on regular premium policies, and 10% of single premiums, written by the Company during the fiscal year from both retail and group customers
- Individual New Business Premium: Insurance premium that is due in the first policy year of an individual life insurance contract
- Individual Rated Premium (IRP): New business premiums written by the Company under individual products and weighted at the rate of 10% for single premiums
- Renewal Premium: Life insurance premiums falling due in the years subsequent to the first year of the policy
- Value of New Business (VoNB): VoNB is the present value of expected future earnings from new policies written during a specified period and it reflects the additional value to shareholders expected to be generated through the activity of writing new policies during a specified period.
- Value of New Business Margin / VoNB Margin: VoNB Margin is the ratio of VoNB to New Business Annualized Premium Equivalent for a specified period and is a measure of the expected profitability of new business
- Solvency Ratio: Solvency ratio means ratio of the amount of Available Solvency Margin to the amount of Required Solvency Margin as specified in form-KT-3 of IRDAI Actuarial Report and Abstracts for Life Insurance Business Regulations
- Net worth: Net worth represents the shareholders’ funds and is computed as sum of share capital and reserves including share premium, share application money and fair value change account net of debit balance in profit and loss account.