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

The next question is from the line of Nischint Chawathe from Kotak Institutional Equities.

Nischint Chawathe

Just trying to understand that in the group protect business, what has driven such high growth this quarter?

Moderator · Conference Operator

The next question is from the line of Shreya Shivani from CLSA.

Shreya Shivani

My first question is on the P&L.

If I look at the net commissions and rewards as a percentage of total premiums, that is slightly up between FY '24 and '25.

So what can it be attributed to?

I mean, are you paying more to the agents?

Or has some terms and conditions been changed with banca channels?

And my second question is on any idea you can give us on the possible regulation, if anything can come up on banca channel?

Are there any advanced talks with the regulator or with any government entity?

Any idea over there would be useful.

Moderator · Conference Operator

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

Prayesh Jain

Firstly, with respect to VNB margins during the quarter, are we also seeing some improvement in margins at product level with respect to protection or with respect to ULIP where the attachment could have gone up?

Or could you give us the mix in the individual protection, how has been the mix between return of premium and the normal?

Moderator · Conference Operator

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

Dipanjan Ghosh

So three questions from my side.

First, you guided for around 25% growth at the agency counter.

Now if you look at for FY '25, your productivity growth at agency was around 15%, mainly coming in from incremental agency.

So if I were to look at the future guidance of 25% growth at agency, how would that break up between new agent additions versus productivity improvement?

And how much scope is there to improve productivity?

Second question on this part is on the agent part, are you also focusing on improving the product mix at the agency counter, basically saying that maybe trying to improve the margin at the agent base?

The third question is in terms of the contribution of the parent bank. while you have mentioned the APE mix, can you give some color of the contribution of the parent bank to the overall VNB of the company?

Those are my three questions.

Moderator · Conference Operator

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

Supratim Datta

My first question is I just wanted a clarification.

When you are saying 13%, 14% growth, is that on total APE or individual APE alone?

If you could clarify that?

And then if I take that into consideration and take this 500 basis point product mix improvement that you're talking about, it seems like back of the envelope math suggests that you're still expecting around 8%, 9% kind of growth in the ULIPs front.

In this quarter, you have seen a decline.

So what gives you confidence that ULIP growth will come back next year given how our markets are?

And my second question is on the non-par side in FY '23 as well when you had launched Smart Platina, we had seen a significant surge in non-par.

And then it kind of fizzled out and the mix again went back to what it was prior to that product launch.

So can you just help us understand why you think that this time it's going to be different and this time the product mix shift is going to be more permanent as compared to what happened in FY '23?

Those are my two questions.

Moderator · Conference Operator

The next question is from the line of Swarnab Mukherjee from B&K Securities.

Swarnabha Mukherjee

I had two, three questions, specifically first one on the channel side.

So I just wanted to understand that in terms of the cost structure and the margins in banca, just if you could highlight, say, between banca and agency, which one is margin accretive.

And given that you have highlighted that agency would be growing faster than banca, this built in the mix, would there be any impact on margin when I think about FY '26?

This is the first question.

Second is in terms of the group protection side, so Credit Life and Group Term Life, as you have highlighted that both have done well.

In Group Term Life also you have gotten some new mandates.

Just wanted to understand that your peers have been highlighting that there is some pricing pressure in this part of the business.

So I mean, how are the pricing that you are getting?

And whether as a whole in terms of Group Term Life, for example, has the margin profile deteriorated in the last year compared to what it was previously?

I understand that it is possibly a lower proportion of our mix than Credit Life, but just wanted to understand this part?

And lastly, the drop in ULIP this quarter that we are seeing, this degrowth, is this a conscious strategy or due to the lack of demand?

Because particularly in agency, we see that there has been a sizable drop and you have highlighted that the focus was on the traditional side more.

So just wanted to understand that part.

And also how easy or difficult is it to reorient the product mix in the agency channel, particularly?

These would be my questions.

SBI Life Insurance Company Limited April 24, 2025

Moderator · Conference Operator

The next question is from the line of Madhukar Ladha from Nuvama Wealth Management.

Madhukar Ladha

Congratulations on a great set of numbers.

Just two quick questions.

First, on individual protection, we're seeing some weakness over there.

So this year, and we've seen a little bit of a decline in that part of the business.

So can you help understand what is happening over there?

And while persistency has improved across most buckets, but in the 49th month, I think there is still some decline over there.

So some understanding on that as well?

SBI Life Insurance Company Limited April 24, 2025

Moderator · Conference Operator

Mr. Madhukar, I would request you to please come back in the queue for further questions.

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

Sanketh Godha

Sir, you told in the call that your contribution of pure term has improved in the entire protection and that is probably one of the reasons your term protection has slowed down a bit.

So just wanted to know what is the mix between ROP and pure term and how much delta contributed to the margin?

And second thing is that you also alluded to the point that you're trying to attach more riders.

So, I just wanted to understand in the total savings business, how much business has a rider attachment or has a sum assured which is more than INR10 lakhs?

Moderator · Conference Operator

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

Aditi Joshi

Just one question from my side.

And this is with respect to the solvency ratio.

So quarter-on- quarter, we have seen some 8 percentage point decline in the solvency ratio, whereas at the same time, look at the interest rate, those have gone down, so you could have some gains on the bond valuation.

And equity markets were also broadly flat quarter-on-quarter basis.

So I'm just wondering apart from the macro being either flat or favorable, what actually caused to that decline?

SBI Life Insurance Company Limited April 24, 2025

Moderator · Conference Operator

The next question is from the line of Mohit Mangal from Centrum.

Mohit Mangal

Just one question.

Non SBI Banca partners.

I just wanted to know how much of this 14,000 branches are actually actively selling our products?

What products they sell?

What are the growth rates?

If you can give some color, that would be helpful.

Moderator · Conference Operator

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

Neeraj Toshniwal

Congrats on the good set.

Just wanted to understand on the guidance, given we have a higher base in agency and a lower base in banca, we are guiding on a kind of still lower growth from the banca and higher from agency.

How confident we'll be making 25% growth on a high base in agency and is the 10% new normal, which will kind of remain or we can see improvement maybe going ahead?

Moderator · Conference Operator

The next question is from the line of Sumit Sharma from HDFC Securities.

Shobhit Sharma

Am I audible?

Moderator · Conference Operator

The next question is from the line of Madhukar Ladha from Nuvama Wealth Management.

Madhukar Ladha

So, in the notes to accounts, it's also mentioned that there is a change in expense allocation methodology, which has resulted in about a INR48 crores increase in policy liabilities.

And I mean, is that sort of set off against the assumption change that you've made?

And can you explain what this is regarding?

And second question on what you mentioned about the COVID cohort, I wanted to just know, is that any particular type of policy or any specific product because of which this is what we've been observing.

Or is it just because of that time frame?

Moderator · Conference Operator

Ladies and gentlemen, that was the last question for today's conference call.

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

Amit Jhingran

Thank you very much, everybody, for your time and queries.

You may get in touch with our Investor Relations team in case you have any follow-up questions at any point of time.

Thanks and regards.

Moderator · Conference Operator

Thank you.

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

Thank you for joining us, and you may now disconnect your lines.

Thank you.

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

Moderator · Conference Operator

Thank you very much.

The first question is from the line of Avinash Singh from Emkay Global Financial Services.

Please go ahead.

Avinash Singh

Very impressive show on margin.

And I mean this again demonstrates your ability to tweak the product mix and your cost effectiveness that, of course, helps deliver this margin.

My question will more be focusing on growth.

The first one is that now, of course, this year, your conscious choice to leave a space or vacate space due to hyper competition in group business has also kind of led to headline numbers being a bit muted.

Now with this base and also whatever is happening now the base turning favorable.

But on the retail side, of course, thrust on non-banca and also banca base turning reasonable, but the noise remains around banca.

So in all , if you were to connect the dots, how do sort of you see growth next year because that's one of the key metrics?

And second, I mean if I see, of course, I mean, your focus on non-banca is delivering numbers, agency has improved.

But two things I noticed about agency.

If I look at just Q4 in isolation, the growth in agency just like a very, very muted 4%.

So the agency channel that was growing at 28% in 9 months, the full year number has come to 21%.

So Q4, what happened to this agency growth?

And in relation to that, agency has seen a large number of deletions, is there some sort of a strategic choice that you are kind of removing the inactive agents or so.

There has been a large amount of deletion, so there has not been a net addition this year in agency.

So these are my 2 questions.

Growth outlook, and second on agency.