SBI Life Q2 Results: Net Profit Crawls 0.8% To Rs 380 Crore

The solvency ratio, key indicator of a company’s financial health, of SBI Life Insurance stood at 2.12 per cent for the reporting quarter, against 2.19 per cent on a year-on-year basis.

SBI Life Insurance reported a nominal 0.8 per cent increase in its net profit on a year-on-year (YoY) basis in its second quarter (Q2) earnings on Friday. It logged a net profit of Rs 380 crore for the September quarter in the current financial year (FY24) against Rs 377 crore in the second quarter of the previous fiscal year (FY23).

The insurance firm’s solvency ratio also stood strong but reported a slight decline, the company stated via an exchange filing. The solvency ratio of SBI Life Insurance stood at 2.12 per cent for the reporting quarter, against 2.19 per cent recorded in the same quarter a year earlier. Solvency ratios are a key indicator of a company’s financial health and help in determining the possibility of a company defaulting on it’s debt. 

The company’s net premium income increased 22 per cent on a YoY basis to Rs 20,050 crore in the reporting period. The 13-month persistency ratio of the company improved by 178 basis points to 83.32 per cent in Q2FY24 and the 61-month persistency ratio grew from 52.79 per cent to 56.10 per cent on a YoY basis. Persistency ratio helps measure customer retention. 

The firm’s assets under management (AUM) increased 22 per cent Rs 3.45 lakh crore as of September 2023, against Rs 2.82 lakh crore in the same period last year. The insurance company controlled 27.3 per cent market share in Individual New Business Premium during the first half of the current fiscal year, with a total premium collection of Rs 10,170 crore. This indicated a growth of 20 per cent in the segment for the company.

The company also grew 21 per cent in the Annualised Premium Equivalent (APE), which touched Rs 8,260 crore during H1FY24. APE is a common indicator of determining the business sales in the life insurance industry. During the same period, the Protection Annualised Premium Equivalent (APE) segment grew by 39 per cent, touching Rs 1,070 crore, compared to the same period a year earlier. 

The firm’s Value of New Business grew at a steady pace of 12 per cent and stood at Rs 2,360 crore for the first half ended September in the current fiscal year. The profit after tax during the first six months of the current financial year grew 19 per cent to Rs 760 crore, against the same period a year earlier. The company defined value of new business as the present value of expected future earnings from new policies written during a specified period and reflective of the additional value to shareholders expected to be generated through the activity of writing new policies during a specified period.