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 '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Jhingran, Managing Director and CEO, SBI Life, for his opening remarks. Thank you, and over to you, sir.

Good afternoon, everyone. It is a pleasure to welcome you all to the results update call of SBI Life Insurance for the period ended December 31, 2025. We appreciate and thank you for your valuable time and efforts in analyzing the results and participating in the earnings call. Updates on our financial results are available on our website as well as the websites of both the stock exchanges. Along with me, Mr. Sangramjit Sarangi, President and CFO; Abhijit Gulanikar, President, Business Strategy; Subhendu Bal, President and Chief Risk Officer; Prithesh Chaubey, President and Appointed Actuary; and Smita Verma, Senior Vice President, Finance and Investor Relations are present. The life insurance industry witnessed improved momentum during the third quarter, supported by recent regulatory measures and a gradual shift in customer preference towards protection-oriented products. The exemption of GST on individual policies contributed to improved affordability and added demand during the quarter. We have achieved significant milestone that underscores the strength and scale of our business. Our assets under management, the AUM, surpassed INR 5 trillion, that is INR 5,00,000 crores, reflecting sustained customer confidence and long-term value creation driven by disciplined execution. In December, SBI Life outperformed the overall industry on an IRP basis, driven by volume growth and higher individual policy sales. While in Q3, the company led the private life insurance segment with a 68 basis points gain. Besides, it achieved a 192 basis point gain on a total rated premium basis, reinforcing its strong market position and competitive performance. This performance reflects the resilience, operational efficiency and productivity across all our distribution channels, agency, bancassurance, direct and digital. As customer needs continue to evolve, SBI Life remains focused on innovation and strengthening its offerings to drive sustainable growth and long-term value for all stakeholders. Now let me give you some key highlights for the period ended 31st December 2025. New business premium stands at INR 313.3 billion with a 19% growth and a private market share of 23.5%. Individual rated new business premium, IRP, stands at INR 166.8 billion, with a growth of 15% and private market share of 25.6%. Gross written premium stands at INR 733.5 billion with a growth of 20%. Our profit after tax grew by 4% to INR 16.7 billion as compared to the corresponding period last year. Value of new business stands at INR 50.4 billion with a growth of 17%. VoNB margin stands at 27.2% for the period ended December 31, 2025, with a gain of 34 basis points. Indian embedded value for the company as on December 31, 2025, stands at INR 801.3 billion. Our assets under management stands at INR 5.1 trillion with a growth of 16% over corresponding period last year. Solvency ratio of 1.91x as against a regulatory requirement of 1.50x. We will now update you on each of the key parameters in detail. Let me start with the premium. Individual rated premium stands at INR 166.8 billion, with a Y-o-Y growth of 15%, while retaining our leadership position with a 25.6% private market share and 18.6% total market share, it grew by 14.4% with a 3-year CAGR, outperforming the industry average of 10.4%. Total new business premium is INR 313.3 billion with private market share stands at 23.5%, and total market share stands at 10.1%. Group new business premium stands at INR 87.8 billion, with a contribution of 28% in new business premium. Renewal premium grew by 21% to INR 420.2 billion, which accounts for 57% of the gross written premium. To sum up, gross written premium stands at INR 733.5 billion with a growth of 20% over corresponding previous period. APE stands at INR 185.2 billion, registering a growth of 16%. Out of this, individual APE stands at INR 168.8 billion with a growth of 15%. During the period ended December 31, 2025, total 16.5 lakh new policies, covering 18.3 million lives, were underwritten. The growth in sum assured reflects strong consumer confidence and rising awareness of financial protection. Individual and group new business sum assured increased by 74% and 67%, respectively, compared to the same period last year, while rider sum assured has grown significantly, now contributing 30% of the individual sum assured. Let me give you details about the product mix. For the period of 9 months financial year 2026, guaranteed non-par savings are contributing 18% on individual APE basis, while ULIP stands at INR 114.3 billion, contributing 68% versus 72% last year for the same period. Protection business contributes 9% of APE and stands at INR 16.6 billion. We continue to maintain a strong focus on the protection business, which remains a key pillar of our growth strategy. The protection segment recorded robust performance with a 24% year-on-year growth on an APE basis. Individual protection APE is at INR 6.4 billion with a growth of 21% as compared to 9-month FY '25. It is noteworthy that the pure protection category saw a strong growth of 98% on an individual APE basis, reflecting rising awareness and demand for comprehensive financial protection, while the individual sum assured in the protection segment grew by 87%. Group protection APE stands at INR 10.2 billion with a strong growth of 25%. Credit life APE has grown by 20% and stands at INR 2.1 billion. And GTI APE has grown by 27%, standing at INR 8.1 billion. Individual APE for participating products stands at INR 12.3 billion with an exceptional growth of 116% year-on-year. Our recently launched product, Smart Money Back Plus, has garnered a premium of INR 5.6 billion. Traction in individual non-par saving products on APE basis continues and witnessed growth of 20%. Retirement plans assist customers in building a substantial corpus of funds to maintain the desired lifestyle and manage expenses in their golden years. Total annuity and pension new business, underwritten by the company, is INR 64.1 billion. Moving to update on our distribution partners. With the strength of more than 58,000 CIFs, the bancassurance business of SBI and RRB's contributes 62% of the total APE. On an individual APE basis, it stands at INR 112.3 billion, reflecting growth of 16%. SBI branch productivity on individual APE terms stands at INR 6.4 million for this period, registering a growth of 15%. Banks other than SBI Group are also growing at 24% on total APE basis. As on 31st December 2025, agency individual APE stood at INR 48.8 billion, growing 11% with agent productivity at INR 3,00,000. The channel witnessed a shift in product mix. Non-ULIP share increased from 31% to 37% for a 9-month period, supported by robust 86% growth in agency individual sum assured. The company added over 94,000 agents on a gross basis. We have opened 66 new branches this year. This expansion is aligned with our vision to create infrastructure that supports the long-term development of our agency channel. The other channels, direct corporate agents, brokers, online and web aggregators for 9 months, grew by 33% and contributed 11% of total APE. Non-par business growth through other channels registered growth of 32% on individual APE basis. We are investing in building our online business channel. And for 9 months of this channel has grown by 45% on APE basis. Coming to updates on profitability. Our financial performance reflects the impact of GST and revised labor law. Taking these factors into account, the company's profit after tax for the period ended 31st December 2025, stood at INR 16.7 billion, representing a 4% growth over the corresponding period last year. Excluding this impact, the profit after tax for the period ended 31st December 2025, would have been INR 21.5 billion with a growth of 34%. Our solvency remained strong at 1.91x as against regulatory requirement of 1.50x. Value of new business stood at INR 50.4 billion, reflecting 17% growth with a margin of 27.2% for the period ended 31st December 2025, up from 26.9% in 9-month FY '25, driven by both volume growth and favorable shift in product mix. The margin is reported after accounting for the impact of GST. Excluding this impact, the VoNB margin would have stood at 28.3% with a gain of 140 bps. In Q3 FY '26, VoNB reached INR 22.9 billion, registering a 22% increase over the same quarter last year. Embedded value for the company as on December 31, 2025, stands at INR 801.3 billion with a growth of 16% -- sorry, 18% over corresponding period. OpEx ratio stands at 6.2%, and total cost ratio stands at 11.2% for the period ended December 31, 2025, as compared to 5.3% and 10.2%, respectively, for the period ended December 31, 2024. With respect to persistency of individual regular premium, 13th month persistency stands at 87.1%, with an improvement of 101 basis points. While there has been a slight decline in other cohorts during the current period, we remain confident that persistency will improve by the end of the year. As mentioned in my opening remarks, assets under management stand at INR 5.12 trillion as at December 31, 2025, having a growth of 16%. Net claims settlement ratio stands at 99.3% for this period. Our mis-selling ratio stands at 0.02%, which is one of the lowest in the private industry, and this is achieved through our consistent approach adopted by the company to ensure right selling of 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 99.7% of the individual proposals being submitted digitally. 58% of the individual proposals are processed through automated underwriting. In conclusion, by embedding resilience and continuous improvement at the core of our culture and by strategically strengthening our key channels, we are well-positioned for sustained growth. Our unwavering commitment to delivering exceptional customer service not only deepens client relationships, but also reinforces our reputation as a trusted and leading force in the market. Thank you all. And now, we are happy to take any questions that you may have.

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

Good set of numbers considering the GST, labor code impacts, the kind of consistent margins and a very strong VoNB growth, particularly in the quarter. That's kind of, I would say, great achievement. First is particularly a bit, I would like to know on product mix. So in the current environment, where there had been kind of repo rate cut that led to deposit rates going down, but bond yields kind of holding or inching up, typically, a non-par savings growth one would have expected to be better or rather stronger than the overall growth. But at least in the quarter, it has not moved. So what's happening there? I mean, that is kind of a hampering the demand of non-par in the market -- I mean, your experience. And secondly, related -- or slightly unrelated, solvency at 191% is far, far above I would say than regulatory requirement of 150%. But typically, in your embedded value jumps, and all your, I guess, management threshold is 180-odd percent. So do you see, I mean, this solvency and organic profit generation to be sufficient enough for you to allow a strong growth across product segment, like say, whatsoever product is growing, maybe protection non-par. So I mean, do you see any sort of limitation coming from that side that can kind of lead to some optimization on product or rather your solvency or capital is totally adequate to provide a strong growth across the products? So these are 2 questions.

Thank you, Avinash, for your appreciation. So product mix as far as you were talking about non-par growth, so I would like to highlight that on IRP basis, the growth in pure non-par products, excluding protection, is 10%. Protection has grown by 44%. The numbers of non-par could have been better, but during the quarter, we launched our participating product Money Back, and a lot of our distributors got diverted to that new product, and it showed very strong growth. So if you look at the non-par and par combined growth, it has been much better than our overall IRP growth. As far as solvency is concerned, yes, it has slightly come down in the H1 numbers. But then, that is also a result of our product mix. A lot of protection is being written. And if you look at the total sum assured that has been written by the company, we are one of the highest with more than 74% growth on total sum assured. That is having some impact on the solvency. But at 1.91x, we are comfortable, and we are very sure that going forward, in the short term, this will continue to support our growth.

And just a quick follow-up. I mean, if I were to see, I mean, the labor code impact or GST impact, everything now, particularly is already in numbers and also in product mix terms, typically, I mean, par have done or rather outgrown non-par. So all this factor already is kind of in base. So is it safe to kind of assume that going ahead, the margins typically would be better than where it has been in the quarter? Is it a safe kind of assumption?

So as far as margin is concerned, we are very happy that the guidance that we had provided of between 26% and 28%, we have been able to maintain that at the middle range of that. As far as GST impact is concerned, see that impact is going to continue because the business will be there and commission payment will be there. The GST payment on that commission will continue to be there. But by our internal processes by strengthening our product mix, our distribution mix and having leverage on our other operational expenses, et cetera, we have been able to maintain the margin as per our guidance. So we continue to stick to our guidance of between 26% and 28% in the coming quarter also.

Our next question comes from the line of Prayesh Jain from Motilal Oswal Financial Services.

Congrats on great set of numbers. Just coming to the channel performance. How do you see the SBI as a channel growing from here on? It's been showing a very strong momentum in the last few months. Do you see this momentum getting stronger going ahead? How should we think about SBI as a channel? And what are the kind of levers we have there to grow this business more aggressively?

So as far as channel mix is concerned, we are happy that our overall growth numbers that the guidance that we had provided of about 13%, 14%, we have been able to maintain that and slightly maybe even better than the guidance. Within the channel mix, different channels have their seasonality. And third quarter specifically has always been very good for SBI Life. There is some good traction being seen in the SBI also of late. And we are very sure that in the fourth quarter also, we will be able to maintain our overall growth number as per our guidance of 13%, 14%. And within that, all the channels are performing as per our expectations.

Sir, this 13%, 14% guidance is the APE growth?

Yes. Sorry, come back again.

This 13%, 14% growth is for the full year APE growth.

Yes, yes.

Okay. And -- so what would be your thought process with respect to say, now, we are already into the tenth month of this year, how do you see the next year shaping up for -- from a growth perspective?

So there is good traction being seen in the last quarter. As a company and as a player in the industry, we hope that this trend, noticed in the last quarter, will continue for some time for this quarter and in the coming year also.

Got it. Sir, and your second question is on the cost ratios. While we are amongst the best in the industry, by far the best in the industry, but we've seen this increasing, right, for sort of total cost ratio has gone up to about 11.2% in 9 months. I'm sure there will be some implications of GST and labor laws in it. But as you said, the GST impact is going to be there and -- while labor law could be onetime. But how do we see this cost ratios now going ahead? Do we see this at -- topping out at anywhere close to current levels? Or do you think this will continue to increase?

The cost ratio is also -- you see, the product mix is also one of the factors for the cost ratio. So there is some impact of improvement in product mix on the cost ratio. As you rightly said, GST and the labor code impact has also been there. Going forward, I think we will continue to maintain in the same range, plus/minus approximately.

We have to differentiate between operating cost and commission. Operating costs, like we have -- MD said, we will continue to maintain. And if our product mix further improves, there could be some increase in commission ratio, but that is part of the overall mix, so that should not matter.

Okay. Sir, last question. Anything on the -- there has been a lot of discussions going around with respect to commission cappings in the industry. Any thoughts that you want to share on this one?

So we continue to be the lowest cost operator in the industry, and we are ready for any kind of changes, if any, coming from the regulator side on the commission front.

[Operator Instructions] Our next question comes from the line of Madhukar Ladha from JPMorgan.

Congratulations on a good set of numbers. I have a couple of questions. First, on the VoNB margin. I think, in the first half call, you had mentioned that, ceteris paribus, the impact of GST is about 175 basis points. That would be sort of on a full-year basis compared to like FY '25 full-year margins. I wanted to get a sense that now that this quarter is over, what would that number be? And what is the sort of benefit that we've got because of a better product mix in 3Q? So if I were to just look at 3Q margins, where are we tracking in terms of the impact of just the 3Q margin -- just GST on the 3Q margins? And second, sir, when I look at protection growth, so versus peers, our individual protection growth has been lower. And in this environment, because of the GST cut, et cetera, one would expect like even stronger protection growth. So what's the thought process over there? And how are you sort of looking at protection over the next couple of years, if we can see further acceleration happening over there? Lastly, sir, these new labor laws, can you quantify what is the impact? I may have missed that in your opening remarks. And have you accounted for this impact in your EV disclosure that you have given? Yes, those would be my 3 questions.

So I'll come to your second question first. The protection growth for the year on the IRB basis has been 26.1%. And including group also, we have seen some good protection growth in credit life...

27% odd.

27%-plus. So overall, the protection growth is better than the company's overall growth numbers. Our focus on protection products, as you must have noticed, we have launched several products in last 1 year in the Protection segment and very competitively priced. Our protection product on the YONO channel is also giving us very good numbers. We have sold more than 1.5 lakh policies in the last 9 months in this financial year. So the focus on protection continues to be there. As far as the impact of new labor laws is concerned, it is INR 135 crores, which has been accounted for in our profit statement -- profitability statement. And yes, this has also been counted under the EV calculation. Now, regarding VoNB margin, I will request our Chief Actuary, Mr. Prithesh Chaubey, to respond.

Madhukar, on this margin front, what we explained last time that the full year impact will be 175 basis points and that we primarily will try to get offset by the more better product. If I look into this quarter, the full year, the business impact is around 150 basis points. And this is coming because you might be noticed that there is slightly increase in the ULIP mix and that part, but that also help us to get a lesser impact on the GST. So if you look at YTD basis, it's 110 basis points. So we are still holding up that by end of the year, impact -- most of the impact will get absorbed by our product -- better product mix and maybe left with a 30, 40 basis points, not more than that at the end of the year.

Got it. And just one follow-up. You're seeing the reduction in persistency in the 25th, 37th, 61st month a little bit. Any comments on that? And have we assumed enough? Or do we have some margin of error over there? Or would that result in sort of some negative operating experience?

There is no concern at all in the persistency is concerned. We have got a very good strong growth in our renewal premiums, almost kind of about 20%, 21%. If you see the 13-month persistency, also has shown the growth better as compared to the previous numbers. Only the 61st month persistency, which has come down, which previously also, we have communicated that this is the COVID cohort, which is going to hit this year. This is going to be the last cohort, which we are expecting. 25th month and the 37th month, it is just a marginal, which we are very hopeful that it will be covered up in the current quarter itself. And 49 months, we are very clear that it is going to be positive. So we don't have any issue per se at this moment as far as the persistency is concerned across cohorts.

Your next question comes from the line of Sanketh Godha from Avendus Spark.

Sir, if I understood right, you said in 2Q, annualized impact was 175 bps on the margin due to GST, which you cut it down to 150. And by end of the full year, the impact should not be on an annualized basis more than 30, 40 basis points. That's the way you're trying to tell, sir?

See the impact net of this product mix will be not more than 30, 40 basis points.

Okay. So basically, compared to the last year -- means basically compared to the last year, if you don't make any assumption changes, which you typically do in the fourth quarter, then the margin for the company will be 30, 40 basis points lower compared to the last year. That's the way I need to understand, right?

Yes, that's correct.

Okay. And naturally, assumption changes if you play out in fourth quarter, we will probably add or maintain the margins, maybe hopefully?

Yes. That will come back and then...

It will also depend on the product mix.

Yes.

Understood. Understood. Understood. And the second question, sir, is on the growth. So basically, if I look last 3-odd years, the fourth quarter is typically 20%, 22% lower compared to the third quarter. Maybe that was not the case pre-COVID. I just wanted to understand that the trend will continue because sales typically get upfronted in -- more in 3Q. So is it fair to say that in fourth quarter, your growth will be 20% kind of lower compared to 3Q?

So as far as growth is concerned, for the entire year, we had given a guidance of 13% to 14%, and we continue to stick to that for the entire financial year also.

Understood, sir. And sir, which means that you are already at 16% growth in 9 months, so if you are -- if you don't beat the guidance, then it's like 10%, 11% growth for the fourth quarter that -- I'm assuming that number will be a little conservative, so just wanted to understand that point.

No, no, we will definitely be much better than 10%, 11%, if you look at the individual quarter, but overall guidance for the year remains at 14%.

But -- quarter 3 will remain our biggest quarter.

Yes.

In absolute number.

And sir, so basically, fourth quarter should be smaller than -- relatively smaller then than the third quarter in that sense?

Yes. Absolutely number, yes.

Absolute number, yes, but the growth numbers are different than the absolute numbers.

Understood, sir. And the -- and if you can quantify the guidance for '27, if you have already started working on budget, that would be useful. And second question is, see, now you are the only company among all the listed names, even the recently registered names, you don't have any exposure to deferred annuity. So any thoughts you have on maybe growing the annuity business by launching a deferred annuity? Because now entire industry has launched it. So just wanted to understand your thoughts on that particular product.

So on the deferred annuity, we are already working on that. So we'll do that just to get this -- so we have 1 product. So as of now, we have -- this is not that we don't have deferred annuity. We have a deferred annuity, but that is of single premium. And what we have realized that people are looking for the more limited-pay kind of deferred annuity, so we're working on that, and hopefully, we'll go and launch those products as well.

On annuity per -- 56% of our annuity business -- individual annuity in this quarter with single annuity on rated basis. So the annuity is seeing good traction even without the regular pay deferred product.

No. So the reason I'm asking, sir, is that typically, it is believed that regular pay deferred annuity has a superior margin. And maybe the growth could have been much more accelerated if you would have had that product in your kitty. So from that perspective, I'm just asking any thoughts and -- or fundamentally, you believe that the regular pay deferred annuity is not a great product, and therefore, it cannibalizes into non-par and that's why you don't want to launch it.

No, no. We are working on that, and we will launch that. This is not a question.

It is not that if we don't have 1 product, then our growth is suffering because of that. We continue to take advantage of all available market opportunities. And if something is missing from our arsenal, we have definite reasons for that, and we continue to work on those reasons and introduce appropriate product at appropriate time.

Understood, sir. And maybe if you can -- if you're working on the budget '27 numbers, if you can guide? And lastly, you give rider numbers for the individual sum assured, which is 30 percentage. But if I want to check on ULIPs, what is your rider attachments on premium basis or in policy count, I mean to say?

Policy count, it is approximately 35% to 40%. Premium, we don't look into because peanuts because if you see the most of the saving product you compare rider premium doesn't meet standard. But we are more than happy, and we are trying to improve further this attachment -- rider attachment, and 35%, 40%, our objective is to improve from there. This is -- also indicate that how riders are important for the customer to provide the protection, which is the sole objective for any insurance company like us.

As far as FY '27 guidance is concerned, we are still working on the numbers. We have seen very good traction in the last quarter. And we are keeping a very close watch in how these 1 or 2 months of this quarter pan out, and you will have to wait a bit for the final guidance for the next financial year. But I will assure that it will not be lower than what we are currently growing at.

Your next question comes from the line of Rishi Jhunjhunwala from IIFL.

A couple of questions, sir. One is, this quarter, the amount of par that we have sold is almost more than what we have sold the entire last year or last 4 quarters. So just wanted to understand, I mean, what is driving this, right? I mean, is there a specific push towards this product because there was -- it was easier to absorb some of the GST impact here? Or how do we look at it if it is a one-off, and then, it will drop down to the normal rate going forward?