SBI Life Insurance Q2 Results: Profit Rises On New Business, But Misses Estimates
SBI Life Insurance Co.’s quarterly profit rose on a pickup in new business and a surge in premiums. Yet, the earnings missed estimates.
The private insurer’s profit increased 11% sequentially to Rs 246.6 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 560.5-crore consensus estimate of analysts tracked by Bloomberg.
Other Highlights (QoQ)
Revenue rose 76.4% to Rs 25,404.1 crore, compared with the Rs 17,225.5-crore forecast.
Operating profit rose 8% to Rs 251.9 crore, against the estimated Rs 433.1 crore.
Ebidta margin was at 1% against 1.5%. Analysts had pegged the metric at 2.5%.
Net premium jumped 76% to Rs 14,660.6 crore.
First-year gross premiums surged 157%.
Gross renewal and single premiums improved 55% and 72%, respectively.
Renewal premiums contributed around 53% of the total gross premiums for the July-September period.
Persistency ratios by premium fell for the 13th and 61st months to 78.7% and 43.4%, while they improved for the 25th, 37th and 49th months to 75.2%, 68.9% and 66.3%, respectively.
Solvency ratio was at 2.12 times against 2.15 times in the preceding quarter—well above the statutory requirement of 1.50 times.
The company received a total of 22,606 claims in the half of the fiscal. Net of reinsurance, they stood at Rs 1,340 crore. Of these, 8,956 claims pertain to the first quarter and Rs 570 crore was paid toward claims net of reinsurance. So, total claims received in the second quarter stood at 13,650, that is 1.5 times the claims in the first three months. The amount paid towards claims stood at Rs 770 crore.
SBI Life has set aside an additional reserve of Rs 266 crore towards Covid-19 pandemic as of September 2021.
The after-tax profit fell 32%.
Revenue expanded 19%, while margin contracted 29%.
Value of new business on effective tax rate basis grew 77% to Rs 1,420 crore.
VNB margin expanded to 25.3% from 20.2%.
New business premium grew 14%, while renewal premium increased 9%.
Gross written premiums rose 11%.
Persistency ratios on premium basis improved for the 13th, 37th and 49th months, while they fell for the 25th and 61st months.
Assets under management increased 31% to Rs 2.4 lakh crore.
Return on equity fell to 8.8% against 15% a year ago.
Solvency ratio fell to 2.12 times from 2.45 times.
Shares of SBI Life ended the day's trading up 1.53% compared with a 0.31% decline in the benchmark Nifty 50.