Crime Today News
SBI Life Insurance’s annualised premium equivalent (APE) for the last financial year grew around 9 per cent year-on-year. How did group insurance business perform compared to individual insurance business?
Individual APE grew by around 13 per cent year-on-year, whereas group protection grew by 5 per cent while in the group fund segment there was a de-growth. The group fund management is sensitive to interest rate and we observed increased competitiveness in this segment. Therefore, we focused on those segments which are margin-accretive and beneficial to all the stakeholders. Going forward also, we will continue to evaluate all the opportunities and see how interest rates movement pans out to decide our strategy on the group fund business.
What is the full-year APE growth guidance for FY26?
On the individual APE side, we are looking at around 14 per cent growth, but overall APE basis growth will be somewhere around 12 per cent. We will continue to focus on better than industry growth.
The company’s market share in the private sector life insurance space stood at 20.8 per cent, while for the overall sector it was around 9 per cent in FY25 on total new business premium basis. How would you explain it?
Our total new business premium (NBP) was slightly impacted this year due to lower contributions from the group business, as mentioned earlier. However, when looking specifically at Individual NBP, we experienced a minor dip in our market share within the private life insurance sector which was down by 53 basis points year-on-year. This was primarily because our growth in individual rated premium stood at 12 per cent, slightly below the private sector growth of 15 per cent. However, we could deliver on product mix shift. On Individual rated premium (IRP) basis, the overall industry, including LIC, the growth was 10 per cent. We gained 26 basis points market share year-on-year in overall industry space to 16 per cent for the last financial year.
How much did unit-linked insurance plans (ULIPs) constitute the company’s APE? Going forward would you like to change it?
ULIP has been one of the product lines where the company has been faring very strongly. And, the contribution of ULIP to APE is over 60 per cent. But during the year (FY25), we were following a conscious strategy not to be too dependent on any particular line of business. And resulting from that was our action on developing and launching new products on the traditional side. We launched four products in Participating and Non-Participating segments, specifically focussing on the child segment. This happened during the last quarter (Q4FY25). In fact, we saw good traction. And that resulted in favourable product mix in the fourth quarter, particularly where the ULIP share was around 55 per cent in APE.
Going forward, we will be looking at much better contributions from the traditional segment as we want to bring the share of the ULIPs segment down. But having said so, we are not doing anything to demotivate the sales of ULIPs. What we are trying to do is that whatever the customers decide, whatever is the customer liking, we will offer that product. But we are strengthening the portfolio of our products in the traditional side– the Participating side and Non-Participating side both, including the protection also. So, when the product portfolio gets strengthened, we offer better value for money in that segment also. Thus, the contribution will increase and comparative weightage will be more on the traditional product, which will bring down the overall ULIP contribution to the product. On the individual APE side, the current year’s (FY25) ULIP contribution was around 70 per cent, which we aspire to be around 65 per cent during the year (FY26).
Did market volatility that we saw in Q4FY25 impact the ULIPsegment?
I will say that this was a combination of both the factors somewhat being affected by the market volatility as well as the conscious strategy to launch a bunch of new traditional products, making our distributors active on these new products, which resulted in higher sales of our traditional products.
SBI Life’s agency channel witnessed a muted growth in the fourth quarter last fiscal. What were the reasons?
In the last quarter, we launched a slew of traditional products in the protection segment, in the Participating segment and in Non-Participating segment. And our focus was to increase the activity levels of the agents. Typically, traditional products have lower ticket size as compared to ULIP, which resulted into slower growth than previous quarters. We are working with our agents on improving productivity and activity levels.
Why did the Value of New Business (VNB) margin for last fiscal fall to 27.8 per cent from 28.1 per cent for the previous fiscal? And, what is the margin growth guidance for FY26?
We have been giving a guidance of 27-28 per cent kind of margin during all the last four quarters. And we are happy that we have maintained the range. We have delivered a number which was within this range. Having said so, if you look at the VNB margin of Q4FY25, it was around 30.5 per cent, up by over 200 basis points y-o-y. VNB margin is again a play of various factors, including product mix. The focus on traditional products helped us in improving the margin in Q4. For FY26, we continue to maintain our guidance of 27-28 per cent.
📰 Crime Today News is proudly sponsored by DRYFRUIT & CO – A Brand by eFabby Global LLC
Design & Developed by Yes Mom Hosting
