SBI Life's Q3 Net Profit Soars 71% YoY, Exceeds Expectations
Impressive Q3 Performance
SBI Life Insurance reported a remarkable 71% year-on-year surge in net profit for Q3 FY25, reaching ₹550.82 crore, up from ₹321.75 crore in the same quarter of the previous fiscal year. This performance surpassed most brokerage estimates, which had projected a net profit between ₹400-500 crore.
Strong Growth in Premium Income
The life insurer's net premium income for Q3 FY25 stood at ₹24,828 crore, an 11% increase compared to ₹22,326 crore in Q3 FY24. This growth was driven by a 14% surge in first-year premiums, which totaled ₹1,446.76 crore during the quarter. SBI Life also maintained a robust solvency ratio of 2.04, exceeding the regulatory requirement of 1.50.
Key Profitability Metrics
SBI Life's annualized premium equivalent (APE) for the quarter was ₹6,940 crore, reflecting a 13.2% year-on-year growth, which exceeded the 6.5% growth estimated by brokerages. The company's Value of New Business (VNB) for Q3 FY25 was ₹1,870 crore, an 11% increase from the previous year, with a VNB margin of 27.4%.
Nine-Month Performance
For the nine-month period ending December 31, 2024, SBI Life reported an APE of ₹15,970 crore, an 11% increase from ₹14,390 crore in the same period last year. The Value of New Business (VoNB) during this period rose by 6% year-on-year to ₹4,290 crore, with a VoNB margin of 26.9%, slightly lower than the 28.1% in the corresponding period of FY24.
The company also reported strong improvements in persistency ratios, particularly at the 13th month and 61st month levels, which increased by 83 basis points (bps) and 521 bps year-on-year, demonstrating the firm's focus on customer retention.
Asset and Distribution Overview
Assets under management (AUM) rose 19% year-on-year to ₹4.42 lakh crore as of December 31, 2024, with a debt-to-equity mix of 61:39. Notably, 94% of its debt investments are in AAA and sovereign instruments. The bancassurance channel remained a key distribution contributor, accounting for 63% of the APE in the first nine months of FY25. The agency channel recorded a 28% share, and other channels contributed 9%. The company has a network of over 309,590 insurance professionals and 1,086 offices across India.
Stock Performance
Following the release of these strong results, SBI Life's share price rose, closing at ₹1,539 on the NSE, up 1.7% from the previous close.
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