SBILIFE — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to the SBI Life Insurance Company Q4

Thank you very much.

We will now begin the question and answer session.

Our first question is from the line of Madhukar Ladha from Nuvama Wealth.

Please go ahead.

Madhukar Ladha

Congratulations on a good performance.

I have a couple of questions.

I'm just looking at the EV movement.

And there's a very big release in the mortality, morbidity and operating variance.

So can you explain what really helps that?

And we've seen 2 years of good reserve releases of that.

The other thing on the monthly numbers that come out Jan and Feb were very strong months, what actually sort of went wrong in March because we would have expected a stronger March to come through as well.

And can you also comment a little bit about product level margins.

So are we seeing any changes in the nonpar and par business SBI Life Insurance Company Limited April 26, 2024 sort of margin at the margin level.

So, yes, those would be my three questions to begin with.

Moderator · Conference Operator

Thank you.

Our next question is from the line of Prayesh Jain from Motilal Oswal.

Please go ahead.

Prayesh Jain

Hi, and congratulations on a good set of numbers.

Just could you repeat the point on the VNB margins, what has contributed to improvement in margins?

Moderator · Conference Operator

Thank you.

The next question is from the line of Sanketh Godha from Avendus Spark.

Please go ahead.

Sanketh Godha

Yes.

Thank you for the opportunity.

Sir, actually the biggest question what I have is that in the current quarter, your banca channel seems to have been muted, very muted actually because you don't have a base problem what other private companies had.

And the growth has been pretty weak in the banca channel low single digits.

Sir just wanted to understand what led to that muted trend in the banca channel growth both in SBI and other banca relationship?

And I think one of the participants asked that question why March suddenly fell off the cliff when Jan and Feb were good.

So I just wanted to understand how do we read these numbers?

And how you expect banca to do going ahead in that sense.

That's my first question.

Maybe after you answer that, I might squeeze in one more.

Moderator · Conference Operator

Thank you.

The next question is from the line of Mahek from Emkay Global.

Please go ahead.

Mahek

Thank you for the opportunity.

Congratulations on the good set of numbers.

I have two questions.

One is, what would be the reason for a negative INR285 crores of rewards in the quarter 4 results?

And secondly, if I see that 37th month persistency it is at 71.3% which has seen a drop in this year.

So I wanted to move the reason for the drop.

That's all?

Moderator · Conference Operator

Thank you.

Our next question is from the line of Supratim Datta from Ambit Capital.

Please go ahead.

Supratim Datta

Thanks for the opportunity.

So firstly, I wanted to understand on the group savings side there has been a significant jump this year.

Just wanted to understand what is driving that.

And the second question was on SBI.

I know you have answered this before, but I just wanted to understand that we have seen significant productivity gains there at a branch level.

Now that seems to be plateauing.

So would it be fair to assume that now further penetration within the branches could become more limited and you should be growing more in line with the bank as compared to ahead of the bank?

Is that a correct assumption to make?

Those are my two questions.

Moderator · Conference Operator

Thank you.

The next question is from the line of Nidhesh Jain from Investec Capital.

Please go ahead.

Nidhesh Jain

Thanks for the opportunity.

Two questions.

Firstly, what all is constituted in other channels that we disclosed in bancassurance I think only SBI Bank is considered, but all channels are included.

And secondly, if you can give the breakup of protection -- SBI Life Insurance Company Limited April 26, 2024 group protection APE between group protect between GTI and Credit Life for FY '24 and FY '23?

Moderator · Conference Operator

Thank you.

The next question is from the line of Dipanjan Ghosh from Citi.

Please go ahead.

Dipanjan Ghosh

Hello.

Good evening.

Hope I am audible.

So two, three questions from my side.

First, a data-keeping question.

If you can split your expected return on the existing business in your EV work between the unwinding at the reference rate and unwinding on real-world excess returns.

I assume you used to report it historically.

Second, on these other channels which has been the non-SBI non-agency channel which has been reporting quite a strong growth.

I just wanted to get some sense of how do you think of the payout shaping up at these counters once you start expanding at a very fast pace at some of these counters?

And lastly, on the margin front, let's say, next year when ULIPs, for example, let's say, we have to compress, do you see competitive pressure rising in some of the other channels in terms of the pricing pressure that maybe your competitors are willing to offer.

So is there a risk to your product level margins?

So those were my three questions.

Moderator · Conference Operator

Thank you.

The next question is from the line of Neeraj Toshniwal from UBS India.

Please go ahead.

Neeraj Toshniwal

Hi, sir.

Congrats on good set.

Wanted to understand again on the product level margin, are we seeing improvement in any of the product margin because even we are ULIP heavy, so we have managed to deliver a decent set and would this mean that this will become base margin going ahead, you can see further improvement with the mix improving in FY '25?

Moderator · Conference Operator

Thank you.

Our next question is from the line of Anurag Mantry from Oxbow.

Please go ahead.

Anurag Mantry

Just one question from my side.

So there was total number of policies, the individual number of policies in FY '24 based on the IRDAI data has grown only 3% this year.

This used to be like mid double digit last 2 years.

So anything specific to understand from this?

Moderator · Conference Operator

Thank you.

The next question is from the line of Aditi Joshi from JP Morgan.

Please go ahead.

Aditi Joshi

Thank you for taking my question.

Just my first question is on the economic assumption change.

So when I compare this economic assumption change the impact of this in the embedded value movement versus the NBV movement, the economic assumption change is positive for EV whereas negative for VONB.

So can you please help explain this difference?

And just a related on that before you change your assumptions, how many years of experience you observed as in the last 2 to 3 years or 5 years before you think that it's time to make the changes in the assumptions?

And my second question is related to the growth differential between Tier 2, Tier 3 and Tier 1 cities, if you are able to share some growth numbers as in where the growth is higher in NBV.

Is it higher in Tier 1 as compared to Tier 2 or Tier 3 or vice versa?

Moderator · Conference Operator

Thank you.

Our next question is from the line of Anirudh Shetty from Solidarity Advisors Private Limited.

Please go ahead.

Anirudh Shetty

Thanks for the opportunity.

So my first question is around the GTI business.

You shared the APE figure for FY '24, could you share that for the FY '23 as well?

Moderator · Conference Operator

Thank you.

The next question is from the line of Punit Bahlani from Macquarie Capital.

Please go ahead.

Punit Bahlani

So just on an APE growth basis.

Your peers have said that they are expecting APE growth in line with industry level, but what would be your expectation sir?

I know you don't want to give an explicit guidance, but will we be expecting higher than industry growth or in the high teens or what are your comments?

Moderator · Conference Operator

Thank you.

The next question is from the line of Roshan Chutkey from ICICI Prudential.

Please go ahead.

Roshan Chutkey

Thanks for taking my question.

Just wanted to understand from a regulatory standpoint, what do you worry now?

How should one think about it?

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, we would take that as our last question for today.

I would now like to hand the conference over to Mr. Amit Jhingran for closing comments.

Amit Jhingran

So thank you very much everybody who was here and we had very fruitful discussions and the insights into the industry.

I thank you again for all the time and all the queries.

I hope we have provided you with satisfactory answers.

If you need any clarification, you can reach to our Investor Relations Department and we will be happy to satisfy any other queries regarding it.

Thank you.

Good bless you all.

Moderator · Conference Operator

Thank you, members of the management.

On behalf of SBI Life Insurance Company, that concludes this conference.

Thank you for joining us.

You may now disconnect your lines.

SBI Life Insurance Company Limited April 26, 2024

Safe harbour

Please note that this transcript has been slightly edited for the purpose of clarity.

Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'.

These statements by the Company and its management are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and are not guarantees of future performance.

Because forward- looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control, and actual results could differ materially from those presented in the forward-looking statements.

Questions and answers

“SBI Life Insurance Company Limited