SBI Life Insurance Company Limited (SBILIFE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to SBI Life Insurance Company Limited Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Jhingran, MD and CEO, SBI Life Insurance. Thank you, and over to you, Mr. Jhingran.

Good evening, everyone. We are happy to welcome you all to the results update call of SBI Life Insurance for the period ended December 31, 2024. We appreciate and thank you wholeheartedly for your time and efforts attending our earnings call. Update on our financial results can be accessed on our website as well as on the websites of both the stock exchanges. Along with me, Sangramjit Sarangi, President and CFO; Abhijit Gulanikar, President, Business Strategy; Subhendu Bal, Chief Actuary and Chief Risk Officer; Prithesh Chaubey, Appointed Actuary; and Smita Verma, Senior Vice President, Finance and Investor Relations are present. As we reflect on our results for this quarter, we would like to begin by acknowledging that Q3 2023 was an exceptionally strong period, setting a very high benchmark for us. Despite the high base from last year's Q3, we are pleased to report that company has continued to perform well. Not only did we manage to sustain our momentum, but we also achieved growth. During the quarter, December month's new business premium was one of the highest-ever collection for the company. This speaks volumes about our team's resilience, adaptability and commitment to delivering strong results regardless of the high benchmark we set last year. I am pleased to share that we have seen progress in several key areas as compared to previous corresponding period, demonstrating the strength and the dedication of our teamwork. We are building a strong base by improving the agency and banca productivity levels. By leveraging customer insights and industry trends, we have created solutions that provide enhanced coverage, greater flexibility and more tailored options, ensuring that we continue to deliver exceptional value. I am delighted to share that as per our ongoing commitment to meet the evolving needs of our customers, during the month of December, we have successfully added one more product in our Platina series, that is, Smart Platina Supreme, a non-par guaranteed savings product which provides a stable guaranteed income stream, ensuring financial security, and it is for any life stage. The initial response has been encouraging, and the company collected more than INR 2.5 billion of premiums under this product within a span of 20 days. Moving forward, we remain committed to continuously assessing and refining our offerings, ensuring that we are well equipped to meet dynamic demands of our customers. We recognize that staying attuned to customer preferences and market trends is essential for our continued success. Now let me give you some key highlights for the period ended 31st December 2024. New business premium stands at INR 262.6 billion and maintained private market leadership with a share of 22.4%. Individual new business premium stands at INR 198.6 billion, with a growth of 12% and private market share of 27.8%. For Q3 FY '25, the company's individual new business premium grew by 10% as compared to industry growth of 6%. Gross written premium stands at INR 609.8 billion, with a growth of 9%. Protection new business premium stands at INR 27.9 billion. Profit after tax stands at INR 16 billion, with a strong growth of 48% over corresponding period last year. Value of new business stands at INR 42.9 billion. VoNB margin stands at 26.9% for the period ended December 31, 2024. Embedded value of the company as of December 31, 2024 stands at INR 681.4 billion, registering a growth of 17% over March 31, 2024. Our assets under management stand at INR 4.42 trillion, with a growth of 19% over corresponding period last year. Solvency ratio of 2.04 as against the regulatory requirement of 1.50. We will now update you on each of the key parameters in detail. Let me start with the premium. Individual new business premium has grown to INR 198.6 billion, with a growth of 12% over last period. The company's private market share stands at 27.8%, and industry market share stands at 17.4%. For the quarter 3 FY '25, the company's individual new business grew by 10% as compared to industry growth of 6%. On individual rated new business, we stand at INR 145.5 billion, with a growth of 14% over the last period and maintaining our leadership position with private market share of 25.3% and total market share of 17.8%. The company's 3-year CAGR of IRP, that is individual rated new business premium, stands at 17%, outpacing the industry CAGR of 13%. This is on backdrop of consistent growth in performance, which company delivered year-on-year. We have witnessed some headwinds in group business, particularly with our group savings products. Group new business premium stands at INR 64 billion, with contribution of 24% in new business premium. Having said that, we have collected total new business premium of INR 262.6 billion. The company's private market share stands at 22.4%, and total market share stands at 9.5%. The company's 5-year CAGR of new business premium stands at 15%, outpacing the industry CAGR of 7%. Renewal premium grew by 15% to INR 347.3 billion, which accounts for 57% of the gross written premium. To sum up, gross written premium stands at INR 609.8 billion, with a growth of 9% over corresponding previous period. In terms of APE, premium stands at INR 159.7 billion, registering a growth of 11%. Out of this, individual APE stands at INR 147.3 billion, with a growth of 14%. During the period ended December 31, 2024, a total of 15.88 lakh new policies were issued. That is 1.58 million. Number of lives covered during the period ended December 31, 2024 is 18.4 million. The growth in sum assured serves a positive indicator of consumer confidence and the increasing awareness of the importance of financial protection. This upward trend reflects a shifting mindset among individuals who recognize the need for comprehensive coverage to safeguard their future. Individual new business sum assured registered a growth of 33% over corresponding previous period, and the -- for the quarter, growth was at 46%. Let me give you detail about the product mix. As on December '24, our guaranteed non-par saving products are contributing 18% on individual APE basis. Individual ULIP new business is at INR 127.4 billion, with a growth of 25% over corresponding last period and constitutes 64% of individual new business. The growth in ULIP can be attributed to the movement in equity markets. The trend is evident across the industry as more customers seek products that blend investment opportunities with protection. Individual protection new business is at INR 5.2 billion. Individual protection business for Q3 FY '25 has grown by 12% on NBP basis as compared to Q2 FY '25. Group protection new business stands at INR 22.7 billion. Credit Life new business has grown by 8% and stands at to be INR 17.3 billion. Protection business contributes 8% of APE and stands at INR 13.5 billion. Retirement plans assist customers in building a substantial corpus of funds to maintain their desired lifestyle and manage expenses in their golden years. Total annuity and pension new business underwritten by the company is INR 53.1 billion. Moving to update on distribution partners. With the strength of more than 57,000 CIFs, SBI and regional rural banks' bancassurance business contributes a share of 63% on total APE basis. And on individual APE basis, it stands at INR 97.2 billion, with growth of 8%. SBI branch productivity on individual APE terms stands at INR 5.5 million for the period and registered a growth of 9%. As mentioned in our last quarter's call, the digital channel within SBI bank relationship is garnering good numbers of customers. And during the quarter, it attracted more than 50,000 customers opting for protection policies through self-initiated journey. With the enhanced focus on agency channel and strategic launch of agency 2.0, we have witnessed impressive strides in agent activation, agency channel productivity, onboarding of new agents and better collaboration between agents. Our agent productivity for the period stands at INR 2.9 lakhs on individual NBP terms, registering a growth of 27% over corresponding previous period. Agency registered new business growth of 36% over corresponding previous period and contributes 26%. Agency channel individual APE showed a growth of 31% over last period and stands at INR 44 billion. As on December 31, 2024, the total number of agents stands at 2,41,251. During the period ended December '24, the company added more than 75,000 agents on a gross basis. As part of our strategic initiative to strengthen our presence across the country, we have opened 46 new branches this year. By the end of the financial year, we plan to add an additional 40 branches. The expansion is aligned with our vision to create infrastructure that supports the long-term development of our agency channel. Our expansion targets are carefully designed to cater not only to Tier 1 and Tier 2 cities but also to underserved Tier 3 and Tier 4 regions. All these steps have resulted in increase in the share of agency channel in individual rated premium from 26% in previous period to 30% in current period. During the period ended December 31, 2024, other channels, that is, direct, corporate agents, brokers, online and web aggregators, grew by 26% in terms of individual new business premium. Linked business through other channels registered growth of 53% on APE basis. We are investing in building our online business channel. Individual rated premium through this channel has grown by 71% for the current period as compared to previous period of last year, and protection business through this channel on IRP terms grew by 23% as compared to previous period last year. Coming to updates on profitability. The company's profit after tax for the period ended December 31, 2024, stands at INR 16 billion, with a robust growth of 48% as compared to previous corresponding period. Our solvency remained strong at 2.04 as against regulatory requirement of 1.50. Value of new business stands at INR 42.9 billion, with a growth of 6%. VoNB margin stands at 26.9% for the period ended December 2024. The shift in VoNB is mainly on account of increase in share of ULIP business as compared to previous periods. Embedded value for the company as on December 31, 2024, stands at INR 681.4 billion, registering a growth of 17% over March 31, 2024. Coming to operational efficiencies. Our OpEx ratio stands at 5.3%, and the total cost ratio stands at 10.2% for the period ended December 31, 2024. With respect to persistency of individual regular premium, 13th month persistency stands at 86.10%, an improvement of 83 basis points. And 61st month persistency stands at 63.29%, an improvement of 521 basis points. As mentioned in my opening remarks, asset under management stands at INR 4.42 trillion as at December 31, 2024, having growth of 19%. Death claim settlement ratio stands at 99.3%. The company has registered an improvement of 44 basis points over last period. Our misselling ratio stands at just 0.03%, which is one of the lowest in the industry, and this is achieved through our consistent approach adopted to ensure right selling to the customers. Digitalization is transforming the life insurance industry, enabling us to deliver enhanced services and a more seamless experience for our customers. As we embrace this digital transformation, we remain committed to innovation and excellence, ensuring that we stay ahead in an increasingly competitive landscape. The company continues efficient usage of technology for simplification of processes, with 99% of the individual proposals being submitted digitally. 50% of the individual proposals are processed through automated underwriting. To conclude, by fostering a culture of resilience and continuous improvement, supported by a clear focus of developing agency channel along with the partner bank network, we are confidently positioned for the future. Our commitment to exceptional customer service strengthens client relationships and reinforces our status as a trusted leader in the market. With a focus on long-term, sustainable and profitable growth, we aim to create lasting value for our customers, shareholders and communities, paving the way for a prosperous future together. Thank you all. And now we are happy to take any questions that you may have.

[Operator Instructions] The first question comes from the line of Avinash Singh with Emkay Global.

Good set of numbers, particularly considering the backdrop. A few questions. The first one would be more that now, I mean, of course, we have crossed the 9 month. So there should be more clarity around what's happening with your main channel bank, SBI bank and also how agency is performing. So if -- and also the impact of surrender regulation, of course, it is known in reported numbers. So if you can sort of provide your guidance regarding growth and margin for the full year FY '25. And related to that, if you can just try to quantify if at all, there was some impact from this [ product ] filing under new surrender regulations. That's the question number one. Second would be agency, of course, the addition and deletion are kind of a pretty regular. But if I see particularly this quarter, somehow agency deletion seems to have picked up, I mean, nearly 50,000-odd. So addition is like a 25,000 per quarter that has been happening for the last 3 quarters. But deletion has certainly picked up in Q3. So what is going on there with the agency, if you can just sort of provide more color? And lastly, one more. Protection side, again, I see that individual protection, the decline had kind of nearly arrested, more or less a quarter headwind, flat Y-o-Y basis. And if we understand the pickup with the product like smart -- that Smart Shield Premier and that of product targeted at bank customer is good. But I think the premium growth for individual protection is not kind of still coming to positive. If you can just help understand if there is a significant change in regular protection vis-à-vis return of premium product on a year-on-year basis?

First of all, thanks for congratulating on our numbers. Your first question about the growth, banca and agency. So you would have noticed that our growth for the first 9 months is in line with the kind of guidance that we had at the end of second quarter, the first half year, when we said that we will be growing somewhere around 15%. And on IRP basis, that growth is more or less there. On both the channels, agency as well as banca, the growth is more or less is in line with the targets that we had taken for the year. And banca channel grew by almost 10% in first 9 months whereas agency channel is growing by almost 29% to 30% in the first 9 year -- first 9 months. For the remaining period also, we expect the growth to be in the same range. And overall basis, we continue to stick to our guideline of 15% on IRP basis. Your second question was regarding the number of agents addition, as you said, is around 75,000. But net addition is less because the deletion for the period is a little higher. The basic reason behind that is that the company has changed the definition of active agents. And now with the stricter enforcement of the activation guideline, we have deleted a large number of agents who were not active as per company's definition during the quarter. So that number is approximately 42,000, 45,000 during this quarter. So going on -- this was a onetime exercise. And going on, we will continue to stick to this definition only. So going forward, the net addition numbers will be better. Coming to protection. We have seen a shift towards the pure protection products as compared to the return of premium policies. Now 63% policies are in the protection segment. That mean -- I mean 63% policies are with the return of premium whereas the pure protection has increased to 37%, and that is being reflected in our product portfolio now.

And if you can just sort of provide some color on any impacts from the surrender regulation changes on the margin? Because I mean, in the margin walk, of course, I mean, that part might be included somewhere in the operating assumption changes or something. So if you can just help understand if there was any impact from the surrender regulation changes.

Yes. So all our products have been relaunched with the new guideline of first year surrender. But 1 quarter is a very, very short period to have any kind of experience and any kind of margin impact on overall company basis. We will see that how this surrender in the first year pans out and how it affects our margins.

Just to also add that what we have mentioned earlier as well that our impact, even potential impact is bare minimum. We don't see much impact will come in on account of the surrender.

Next question comes from the line of Shreya Shivani with CLSA.

My first question is on the individual protection. So we had mentioned in the last quarterly call that we've launched the 3-click product on YONO and that should see better growth in the quarters to come. So while there is a good quarter-on-quarter pickup, but is it -- I wanted to understand, is it far more difficult to scale up a product just on YONO app? Or is this product also available in other channels? I wanted to understand some color around this product and whether the margins of this product are higher or weaker than our earlier versions of individual protection products that we have. Second is just an update on the banca channel. There were quite a bit of noise around the misselling or the concentration risk, et cetera, in this channel. And we've also noticed that the regulator has set up a task force on the banca channel in October 2023. So if you can give us any update of what came out of it, what -- any commentary that -- any interactions that you've had. And how should we look at this channel? I understand you've given us a growth guidance that it should pick up. But from the regulators' point of view and the different task force that have been set up around it, what's going on, if you can help us with this.

So first, talking about the individual protection product on the YONO platform that we were talking, which we informed last analyst call which you were referring to. So this product, we are happy to say that contrary to your perception that it is difficult to sell, in the last 4 months, we have been able to sell more than 70,000 policies of this product, almost 73,000 as on date. So one thing that we have noticed here that -- and in the earlier question I responded also, that in this particular product, we are seeing a good growth in pure protection policies in place of the return of premium policies. That has improved our sum assured. Of course, the ticket size in pure protection is much lesser than the return of premium products. So it is not reflecting on the total premium side but the number of policies. And overall, we are happy the way this product is faring. Talking of banca channel, you are right that there is a lot of noise in the market. But as on date, we have not heard anything from the regulator on this particular subject. And I would like to emphasize that IRDAI always had a consultative kind of approach on every subject. Whatever they have done, they have done after floating a paper, taking -- circulating draft guidelines, taking industry view, and then only they have decided on anything. On banca channel, we have not received any consultation paper or any task force that you were talking about. We have not heard about that. So it is all around in the market, but nothing concrete as on date from either the regulator or from the ministry side.

Sir, the task force, actually, there was a document on the IRDAI website. I know it's old. It's back in October 2023, but -- and there were other life insurers who have said the other representatives who are going to be a part of the task force. I saw that SBI Life was not mentioned there. So I mean it seems a little confusing, right, because it's not just that in the media they have said a year before they started speaking in media. They had also put out the document on their own website. So then it adds to the fire, unfortunately. I mean it adds to the confusion, unfortunately. That's why these questions are coming up.

So I mean in the recent past, we have not heard anything on this subject from the regulator, and that is what we stand by as on date. Having said that, whatever guidelines will come in, we will definitely go along with those guidelines. And we -- as you must have noticed, we are also focusing on our agency channel to take care of any contingency. But as on date, there is no such thing in the discussion.

Next question comes from the line of Supratim Datta with AMBIT.

My question is on the agency side. I understand you have laid out certain plans that you want to do this year. But if I have to take a 5-year view, by when do you think agency can go up to around 50% contribution to the overall APE? And what all building blocks we would need to put in place for agency to contribute 50%? If you could give us some color on that. And then in that, what would be the banca growth then we'll have to build in? If you could give us some color on that, that would be very helpful. That would be my first question. Then on the banca growth, when do we think the banca growth will get ramp up and get closer to the overall APE growth that we are delivering? Currently, it's still in the single digit. So by when do we think that gets up to the double-digit figure that we used to do 1 year back? And what -- again, what all will be the drivers of that? If you could give us some color on that. And lastly, coming to the product -- new products. You launched a new product in the non-par side recently. If you could give us some color that -- how that has tracked in December, if you could give -- and how do you see that play out over the remainder of the year? And two, given ULIP has been a key driver of growth and we are entering a cycle where the overall equity market growth might be muted, in that scenario, what would be the key products that we would be focusing on to drive growth? If you could give us some color on that, that also would be very helpful.

So if you look at our distribution mix, the overall banca contribution is much higher than the agency. And if you are talking about 50% agency share, then obviously agency growth will be higher than banca growth. So we cannot have a situation where banca growth is in line with the overall APE growth and agency share is also growing. That itself becomes contradictory. We have identified a lot of opportunities on the agency side. And we want to take advantage of that, and that is why we are strengthening our agency channel by opening more number of branches, employing more agents, increasing agent productivity and all. And that is already getting reflected in our first 9 months number. Going forward also, we will keep on adding more branches and more agents and have a higher agency growth. Banca growth at 10%, I will say with the kind of base that we have, is pretty satisfactory. And with the very strong partner bank with us, we will continue to explore all kinds of opportunities. And as I already informed in the last analyst call also, that in addition to the CIF network, we are also developing the alternate digital channel on the banca side. And as I already informed, with one product and more than 70,000 policies in the first year, we are pretty confident that this channel will also start contributing in a bigger way in coming times. So we stand by our overall growth forecast in the medium term of 15% to 17%. And with the kind of growth in the banca channel, let's say, 10% and agency channel at 30% plus. Talking of -- would you like to take the product thing? Yes, Sangra.

Product we have launched in this quarter, which is Smart Platina, which is on the non-par side and which has done very well. And we expect that this momentum will continue into this quarter. And -- but yes, subject to the kind of rate of interest which is expected to come by from the RBI, but at this moment, it is going as per expectation. And we expect that it will continue the same momentum in this third -- fourth quarter of FY '25. As far as ULIP, you have mentioned about the market going down and it will have some impact. The last 3 months, the market correction has happened. But we have not seen any kind of connection between the market going down and the ULIP business going down because similarly, if you have seen already in the SIPs where mutual funds have been increasing month-on-month, the last 3 months consistently. And we don't see any kind of challenge for the ULIP per se because the experience in the past, the number shows that whenever the market is getting corrected, ULIP doesn't get any much impact per se. And there is the right opportune time for the customers to invest because you get a lower NAV. And subsequently, by the time of 5-year to 7-year horizon, you get a better opportunity for a good return. So we don't see any challenge for us as far as ULIP is concerned.

Got it. Sir, if you could tell us what is the APE of the Smart Platina in December? If you could give us some color on that, that would be helpful.

INR 250 crores is the number. I think it is there in our opening remarks.

Approximately INR 250 crores in the month of December.

Next question comes from the line of Prayesh Jain with Motilal Oswal Financial Services Limited.

Good set of numbers. Just, sir, one question is on the SBI channel. We saw, I think, a decent growth coming back in this quarter. What different did we do in this particular quarter as compared to the first half, where we had seen some slowdown? Extending that question, the YONO sales, the sales from YONO app, do they classify under SBI bank itself? And what about the other group companies of SBI, like SBI Securities or any other companies that kind of sell products of SBI Life? Would they be classified in that? This would be my first question.

So YONO product does get classified under the banca channel. But the other group company, that is, SBI Securities, they are our corporate agent. That sales is a very small in volume, and that does not get classified under the banca channels. That is under corporate agent channel. Yes. Regarding growth, I mean, even if you look at the 3 quarters of this financial year, the first quarter was pretty strong. Third quarter was pretty strong. So 1 quarter growth, 2% or 3% here or there doesn't matter much. These kind of things do keep happening. But overall, growth strength is intact, and we stand by that.

Sir, and just to this -- the banca channel, do you plan to tie up with more banks and diversify your product distributor mix further with respect to the banca channel in particular? What is the strategy there?

So we are always on lookout for good partners, and it is an ongoing process. Wherever we get good partners at the mutually acceptable terms, we will definitely be onboarding. So there is no embargo on that, or there are no additional efforts also on that. It is a normal business practice of the company.

Sir, and product-level margins, how would they have behaved this quarter? And particularly on ULIPs, the profitability, how would it have moved in this quarter?

Prithesh, please.

I think there is not much significant on the margin. So margins remain, even the product level, more or less similar to that, except in case of non-par or even protection because as you know we have repriced most of the non-par product in the Q2. And Q1, fall of interest rate, we'll pass on to the customer, and that's fully reflected in Q3. So if you look into the Q3 product level margin, there is an enhancement coming from. Also, we have launched some protection riders that attach to the savings product, and the attachment rate is quite encouraging. So that also helping us to enhance the product line margins. So more or less, product line -- margin in the product line is similar. Particularly to the unit-linked product, I think margin is as per our earlier expectation as well. So not much changes on that side.

Sir, last question. If you are -- you guided for a 15% to 18% kind of a growth. That would be an APE basis, right? And what would be your guidance or outlook on VNB growth per se?

We are expecting an individual APE growth of around 15% to 17%. And the VoNB will be in the range of around the current rate, which is going at around single digit or will be around 10%.

Okay. So value of new business growth rate will be lower than individual APE growth. That is what you're saying?

It all depends. So most likely -- ideally, it should be similar to the APE growth. But if you look at our base, our base is much higher, and our target for growth is also much higher. So growing to a higher base with higher growth rate with the same range of margin is a bit difficult task. So what we are saying that there is a rationalization already happened. We used to report the margin of 31%. We have fallen to the 27%. Our objective is to maintain the margin in the range of 27% to 29% kind of thing. To that perspective, we are saying that there is a possibility that our VoNB growth might be slightly lower than the APE growth.

This is for FY '25?

'25 will be definitely slightly lower. But going forward, it will be [ longer ] because even this year already, we grew by 14%. VoNB growth is 6%. So next 3 months, we can't compensate that. But my guidance is in the longer-term perspective. In ongoing basis, we expect it to maintain this margin and grow on that.

Got it. Long term, 15% to 17% individual APE growth and VoNB margin in the range of 27% to 29%, right?

Yes. That's correct.

Next question comes from the line of Dipanjan Ghosh with Citi.

Just a few questions from my side. First, if I look at the embedded value between the third quarter and the second quarter, there seems to be a significant decline. So if you can kind of -- and I would assume this would be because of the equity market movements. If you can just break that up? I know you gave it on an annual basis, but if you can just give some color on the EV movement and if there were any assumption changes or operating variance on the negative side? And if it was investment variance, if you can break it up between equity and debt? Second would be your non-par growth through the agency was quite strong during the quarter. So is it a function of both term and pure non-par or -- and whether most of it was driven towards the last month of the quarter? And is the new product that is witnessing growth in the fourth quarter also being driven through agency? If you can give some qualitative understanding on that. And lastly, one question on your agency. When you mentioned that your agent activation rates have increased and you are witnessing productivity benefits also, could you shed some kind of qualitative understanding on the differential activation rate or the differential increase in activation rates that you witnessed between, let's say, newer agents versus higher vintage agents and a similar qualitative data on the productivity side?

So I'll take the second one first about the agency product mix, which you have asked. Let me tell you that quarter 3 product mix per agency has been very strong for both non-par protection as well as for non-par savings. And that has also continued in the 9-month ending. So non-par protection has seen a higher double-digit growth as well as in the non-par protection also and which we expect that it will continue for the fourth quarter. As far as your productivity or activity of agents are concerned, as we have already mentioned earlier in the opening remarks, so activity -- productivity level of our agents have been very strong. It has gone up to INR 2,91,000. And as far as our active productive agents, productivity also has gone up to now 17 lakhs. So we have been investing a lot as far as agency is concerned, and we expect that it will continue to give us not only the growth but also the higher activity because the agency growth comes generally from the activity increases, and that is what our focus. On the first part is the EV, I request Mr. Prithesh to answer.

So I see -- on the first part, when you mentioned there is a quarter-on-quarter decline in EV, I don't see there is a decline. It's that EV has grown over the quarter. So from -- if you look December till -- September to December, there is a 3.1% absolute growth in EV. Also, we keep disclosing the sensitivity of the economic sensitivity, both in terms of equity and interest rate. If you see, the equity has fallen, and to that extent, EV movement is in line with our sensitivity, so not bad. Second -- other point that you asked, we can confirm -- though we are not disclosing. We are disclosing the September, and eventually we're disclosing the year. Our operating variance is positive. There's no -- and like we're always mentioning that we -- as a company, we adopt the long-term sustainable assumptions. So always, there is a positive variance coming from each and every component, be it the mortality, persistency, our expenses.

Got it. Sir, just one thing I would like to highlight. I think in your presentation, there is some typing error in the Indian embedded value. It's mentioned at INR 618.4 billion. I think the 1 and 8 have got reversed between the BSE filing and the presentation. So...

Yes, I think that...

We'll update that. So we'll update that.

Sure. And just one follow-up on the productivity for active agents, which you mentioned at 17 lakhs. Could you do a like-to-like number for, let's say, Y-o-Y or maybe 2 years back so that we can compare it?

So for our agency, as I said, the productivity is increasing. And Y-o-Y, I can tell you that agent activity -- productivity has increased by 16%. And this is generally the phenomena for us and which is an increasing trend for us as far as our active agent productivity is concerned. But overall, agent productivity also is increasing. So that is also a very good sign. I think we are one of the best in the private industry as far as our agents' productivity is concerned in both the parameters.

Next question comes from the line of Sanketh Godha with Avendus Spark.

Sir, my question -- first question is related to individual protection business. So the individual protection business in APE terms have declined by 18 percentage for 9 months. But you said that the mix changed towards what you call pure protection business as compared to ROP led to that decline. So if I do an NOP calculation, that is a number of policies calculation growth, whether we have seen the growth -- and this mix, 63-36, what you alluded to, is now -- now have stabled. So going ahead, we can see a growth coming back to protection business? Or you believe this mix will keep on changing and the growth will remain muted probably till an optimal mix, what you want to have will impact the production business? So that's my first question.

Sanketh, as we said, the focus is on the protection and that too within the protection -- pure protection. And as already mentioned about our quarter 3 numbers, so it has seen a drastic change in our -- from the ROP to pure protection. So now it is stable around -- I can say, it is between 70-30. We are -- at this moment, is 63-37. But if we are comfortable that it will be in the range of 60-40 in this year. As far as our ROP movement, so you said 19% degrowth in the protection, but the massive growth in our pure protection which is 53% in Y-o-Y. And in the ROP, it has come down. But we expect that this overall protection will continue to be good for us in the next 2 to 3 years. As already mentioned, and the focus is YONO. And YONO has already garnered 70,000-plus policies. And we expect that pure protection will definitely grow. And overall protection also is on the focus for the company to -- in the next FY '26 to '27. And we will stabilize around 60-40 as the ratio for us in the ROP to non-ROP.

Got it, sir. But can you -- just for 9 months, you said 70,000 for the third quarter. But for 9 months, the number of policies in the protection has seen a growth. And if it is, then what is the quantum?

It has seen a growth. But we -- at this moment, we don't have basis. But I can tell you that number in the individual protection, which is in the pure protection, has seen a significant growth of 53%.

Okay. Got it, sir. And sir, the second question, what I had said is, sir, is that you launched, as you told, the Smart Platina plan, which contributed INR 250 crores to December business. So just wanted to understand 2 points. One is that whether the momentum of this growth continues in fourth quarter, you see a product mix change in the fourth quarter towards more non-par compared to ULIPs. And second thing, if that happens, that impact on the margin. And second, is this product, that is, Smart Platina, has a margin better than the overall company average? So if the mix increases, whether it will lead to a better margin profile going ahead. So that is my second question. And lastly, the related point is that if non-par APE growth was 7 percentage for 9 months FY '25, then if this contribution increases, will you expect this growth to be much better for full year and then FY '26 in that sense?

So on the new product, Smart Platina Supreme, the margin is better than the company margin in -- so if this product contribute and that we are expecting that a product contribution will increase, it will help us to enhance the margin going forward. Second part is that we do expect the -- this product would also help to change the product mix for the company as well, and both will result into the better company margin and better VoNB growth as well.

Sir, but you initially just made a comment to one of the questions that you expect VNB growth to be lower compared to APE growth. Then if you have already launched a product which is better margin profile compared to company average and you expect that needs to go up, then I'm just wondering that your VNB growth to be lower than APE growth doesn't tie up with the point what you said right now.

So let me try to reemphasize this point. What we're saying in the longer term, growing with a high growth rate and also maintain the similar level of margin -- enhancing the margin will be slightly challenging. So over the period, longer-term basis, you see the margin that we mentioned that it will remain in the range of 26% to 29%, with the objective to maintain minimum 27% that we're looking for. But some quarter, depending on the growth, you may have to rationalize the margin over the period. And then again, even you're able to achieve the product growth, but if there is a change in the product mix, the non-par reduction may happen. And that also has some impact. So that's the reason we are saying that there is a possibility that VoNB growth might be slightly lower than the APE growth. Like we did -- example is the first of the current financial, if you look at the last 9 months.

Got it. Sir, but on immediate basis, you see a benefit because of the new product launch, and there could be a possibility of margin outlook to be better. That's a fair point to make on a near-term basis?

Yes, that's correct. That's correct.

Okay. And lastly, sir, your total APE growth is 11% for 9 months. And individual APE growth is 14% for 9 months. So just for FY '25, would you want to give a ballpark number what you will grow at? You gave that number for FY '26 or little medium term to be 15% to 17%. But for immediate fourth quarter included, what kind of a growth we can expect for '25 on total APE and individual APE separately?

So we will maintain the same rate of growth what we have done 9 months for this financial year. So as we have already mentioned previously, Sanketh, the individual APE will be in this range of 14%, and total APE will be in this range around 10% to 11%. Strategically, if you have seen that why the overall APE has come down is because of the group fund management business and where, already as MD in the opening remarks said, so the market where we want to be in a profitable business. So that is the reason we are concentrating on individual APE this financial year, around 14%, 15%, and this total APE of around 10% to 11%.

Next question comes to the line of Rishi Jhunjhunwala with IIFL Institutional Equities.

Just a couple of questions. Firstly, on the margin side. I just wanted to understand, you've been able to maintain margins sequentially, whereas the product mix has gotten tilted more towards ULIPs in this quarter. So what were the tailwinds that helped you in this quarter? And also, you mentioned 27% to 29% in the long term. Then outside of a change in product mix where, say, ULIP comes down and traditional goes up and protection goes up in the future, are there any other levers that you can call out?

On the first part, despite ULIP margin [indiscernible] as I mentioned, there are multiple reasons for that. First reason that we have explained a few minutes back that in Q1, we are not able to take -- pass on the fall of -- impact of the yield fall on things. And that part, we have -- all the non-par part, we have repriced in the Q2, And that's reflected the full -- fully reflected in the Q3. That's the reason the non-par margin has gone up as compared to Q1. So that's compensated, to some extent, the impact -- adverse impact on the margin on account of increase in unit-linked business. Also, we mentioned that we launched several protection products, and we also mentioned that pure protection has better margin. So that's also helping us. Second -- other aspect is that we have launched the protection rider and attached to our savings product, and attachment rate is also quite encouraging. That's also helping us to enhancing the margin of that. So despite the product, non-par has not moved and is stable on the similar level. We have seen this. Other aspect that we've mentioned that we get some better term and condition from the reinsurer, particularly for the Credit Life business, and that also helped us to enhance the product-level margin. And altogether, if you club together, that helped to maintain the margin, even enhance the margin for this quarter, if you look at the quarterly sequential basis, despite the mix has increased. And we're also working, and we're going to launch some of the protection rider on the unit-linked business, and we hope that this also help us. Other point is -- other than product mix, there will always be the lever and that we keep saying that, as a company, we try to optimize the value both for the company as well policyholder. And in that prospect, we are evaluating and exploring each and every customer segment and try to design the product for that particular segment, optimize value. And that optimization and segmentation is helping us to enhance the margin. And that is another lever available with us going forward that may improve and enhance our margins going forward.

Okay, sir. And just a second question on banca. And I know in different ways, it has been asked during the call. But just wanted to get some color on -- in terms of slightly medium-term growth from our parent bank, for us to grow double digit in that channel, how much of it is dependent on the penetration levels being lower and the banks willing to push that versus some of the base effect that is already there and probably a caution around the products being sold? So what I'm trying to understand is, how do we get comfort that, that channel, even in the future with the kind of base we have, will continue to grow double digit, if at all?

See, for channel in the banca, particularly we are considering, as initially said, not only for SBI particularly but other banca partners also. So we have currently 5 banca partners. And we also have tied up with Indian Postal Payment Bank (sic) [ India Post Payments Bank ]. So all across, we are seeing that how to penetrate or increase our penetration across the partnerships. As far as the current quarter is concerned, so we have seen with a big base. So last year, if you remember, the industry grew by 8%, and we grew by 18%. With such a large base of the third quarter, that is the biggest quarter for us, we have seen a growth in the banca also. So we believe that there are a lot of levers available for us the penetration, particularly because we have seen till date, the hard rate is 2.5% to 3% penetration in the overall market in the banking side, whoever our partners are. And we will capitalize all our relationships with various models, which we have already been very successful. And we expect that the penetration will increase and the growth will come back. So whatever we have seen during this financial year, I think it will settle down as we have already mentioned. And there are various news which we don't see that any point of reaction. But going forward, it will definitely help us for improvement in our growth rate for the banca partners, along with SBI.

Next question comes from the line of Raghvesh with JM Financial.

Congratulations on a strong set of numbers. Sir, just a couple of questions. First, on the protection piece. I mean if I'm just doing somewhat around INR 100 crores, would have come directly from the new protection plan that you're selling through. So is there a conscious decision to stop selling ROP products? And is it because there has been a poor mortality experience in that segment? Understanding is ROP is typically sent to -- sold to a less affluent segment. So have we seen some negative mortality experience coming from that?

No, it is purely a customer's choice in this particular product on the YONO channel. We have seen a welcome kind of change that customers are going in for pure protection products. There is no conscious decision. We are offering both the options to the customer. But this is a welcome change that customers are opting for pure protection products.

But you do know that under the new guidelines, we have stopped one small-ticket ROP, which we wished to sell earlier. So to that extent, there will be some reduction in ROP in the future.

Okay, sir. And secondly, sir, with a very strong underpenetration of insurance, the 10% growth target from banca, I mean, is it not very low?

So you see, there is a lot of underpenetration and underinsurance both in Indian market. And the same kind of demography is in the State Bank customer group also because the State Bank has now 53 crore-plus customer. Almost every third Indian is having an account with the State Bank. So we are very sure that the growth in the banca channel will be in line with the industry growth at least, and that is why we are projecting these kind of numbers. You would have gone through this Swiss Re report also. Their expectation for the Indian industry to grow is around 7%. 7.3% for the next 5 years. So projecting a 10% growth, I think, that is a fair number. But we are all set to explore and exploit all kind of opportunities available in the market.

Next question comes from the line of Neeraj Toshniwal with UBS Securities.

Sir, just one question on Credit Life. I have missed the number. How has been the growth in this quarter on Y-o-Y in APE terms?

So Credit Life in this quarter has grown 16% over last year.

And the quarter-on-quarter?

Quarter-on-quarter only I'm saying. Q3 FY '25 compared to Q3 FY '24, that is 16%.

Versus Q2?

Q2 versus Q3.

Sequential growth is also there, quite strong.

Q2 was a little muted on the Credit Life side. So Q3 numbers are much better than...

That will be 20%, 25% growth over Q2 according to me. I have not...

What is the absolute number, if you can share, this quarter, absolute Credit Life APE?

No, no. I'll give you growth. 17% growth should be there sequentially.

And absolute number in APE?

[ INR 171 crores ].

Next question comes from the line of Gaurav Jain with ICICI Prudential Mutual Funds.

Congratulations on a good set of numbers. And also, sir, helpful to see that you started giving EV disclosure on a quarterly basis. That is also helpful. Sir, 2 questions from my side. One is on reported profit after tax, we are seeing very strong growth both on a quarterly basis and on the 9-month basis. So if you can shed some light as to, is it the new normal where we can expect the PAT to really grow in this manner? Or is it this year phenomena? And if you can help us understand what exactly helps the PAT growth. Second, sir, on this new non-par product that we had launched and growing and also maybe on the existing products that we have, have we set the clawback provision or the deferred commission payout structure, et cetera, in place?

So coming to your first part, which is profit after tax. So this is a reflection of multiple things. One is that the major contributor of the profit is coming from the investment income. So investment income from both -- from our traditional portfolio, which is excluding par, so non-par and shareholders has contributed the profit for the company. And secondly, the back book also is very strong for us. So renewal premium has grown by 15%. So there is a big back book available for us through which we are garnering good numbers as far as the total PAT is concerned. And secondly, the profit growth projection which is currently seen, we will not give you any kind of guidance because it depends on the product mix and the kind of market movement during that period of time. So because today, we have made profit because of the lesser growth in my traditional business as compared to ULIP business. So if tomorrow. The product mix shifts towards more on non-par and par, so there will be a strain on the PAT. So at this moment, we expect that it will be in the range of around 10% to 15% growth for the year-on-year as far as PAT is concerned. And on the new product, the new non-par which you asked, I think I'll request Prithesh to give -- to answer.

The commission is in line with our previous products. So the commission structure has not changed. The benefit structure has changed slightly, but commission structure has not changed.

Our next question comes from the line of Madhukar Ladha with Nuvama Wealth Management Limited.

Congratulations on good set of numbers. Just a couple of questions. See, the medium-term growth you're still guiding for is 15% to 17%. Now banca channel, as I understood, is not expected to grow that fast. So it'll probably grow at the, whatever, 8% to 11% sort of a range. And it's contributing almost about 65% to individual APE. That basically means that the other channels have to grow at almost probably 25% sort of a number. Now my question is that what is our right to win? How will we be able to recruit that productive and agency channel? And we are also not that competitive when it comes to commission payouts. So would that mean that in order to grow at this rate, we would have to like aggressively also increase our commission payouts? And that would then also result probably in an impact on the margins coming from this channel. So some sort of clarification. And like what confidence do you have that you will be able to grow that other channel at that faster rate and the margins on that channel? So that would be my question. Yes, if you can give me some color on this.

So we just tell you that agency channel for SBI Life has been a consistent growth story for many years now, so more than 10 to 15 years. And the pressure to pay commissions or whatever you were mentioning has already been there. It's not a new phenomena. Our advantage is that our dependence on few agents is very limited. We have a very wide base of agents and activation rates which are quite good compared to some of the other players, and that helps us widen the agency distribution. We think this strategy, we will continue. And it's a sustainable strategy, by which we will be able to grow the agency channel without having to really compete on commission. Commission competition happens largely for very large agents and not for mass of agents, and large part of our business comes from mass of agents. And we should -- there is enough and more scope in India to recruit more agents and grow.

And we are helped in this particular aspect by being -- by having a very strong brand. People have a lot of trust. So despite whatever shortcomings you talked about of the agency channel, we have the largest agency channel in private sector, and it is second only to LIC in India. Despite all these shortcomings, we have been able to create that kind of sales force in the market. And with the kind of policies we have for our agents, we are pretty sure that we will continue to grow in an even better manner in coming times with the kind of opportunities that we have across India.

Okay. Just a follow-up also on protection. You mentioned that 63% is now pure protection -- sorry, is ROP, and 37% is pure protection. I just wanted a clarification. This is on value basis, right, on premium basis, right? Because -- or is it on number of policies?

Madhukar, the overall 9 months ending, the ROP to non-ROP has moved from 90-10 to now 80-20. And we said for the quarter 3, this ratio has changed to now 63-37.

And this is on premium basis.

Premium basis.

This is on premium basis. Understood. Got it. Got it.

The last question comes from the line of Supratim Datta with AMBIT.

I have just one follow-up. So if you could give us some clarity around how the cost structure in bank versus agency differ? And hence, given we are now going to grow faster in agency, we have been growing faster, but that proportion is going to go up. Then how does that impact the VNB margin? Because I just wanted to understand if one ULIP or one non-par is sold in bank versus in the agency, how does the margin or cost structure differ there? If you could help me understand that, that would be very helpful.

See, the major component, the differentiator between the banca and agency is the fixed cost in agency as compared banca. As far as the commission structures are concerned, it is almost similar. And for us, the -- as already said, the agency is a consistent investment for us and which we have been doing it for the last 2 decades. And we will continue to do that. The cost efficiency, which are coming from agency is through product mix and the persistency. And that is very well reflected in our all parameters as far as the margins or the VoNB is concerned. And we don't expect any challenge per se for our agency margin to go further down as compared to banca because banca is definitely profitable for us as compared to agency. But yes, at the same time, product mix also plays a bigger role. And we expect the product mix the way it is now stepping up in agency will definitely give us the better margin going forward.

Got it. And could you quantify how much is the delta between bank and agency VNB margins?

Generally, that is -- it depends on a very various parameters. So we don't disclose on those aspects.

Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Amit Jhingran for closing comments.

Thank you, everyone, for the time and all the queries. I hope that all the queries were responded to by our team and me in a satisfactory manner. But just in case you have anything else, you can get in touch with our Investor Relations team with any follow-up questions. Thank you once again. God bless.

Thank you. On behalf of SBI Life Insurance Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.