SBI Life Insurance Co. Ltd. · NSE:SBILIFE
SBI Life Insurance — Q1 FY2024 Earnings Presentation
47 slides from SBI Life Insurance's earnings presentation, Jul 26, 2023
Slide 1: Cover letter to stock exchanges
July 25, 2023 SBIL/CS/NSE-BSE/2324/80 Assistant Vice President General Manager Listing Department, Listing Department, National Stock Exchange of India Limited, BSE Limited, Exchange Plaza, Phiroze Jeejeebhoy Towers, Plot No. C/1, G Block, BKC, Dalal Street, Bandra (East), Mumbai 400051 Mumbai 40000
Slide 2: Performance for the quarter ended June 30, 2023
News Release July 25, 2023 BSE Code: 540719 NSE Code: SBILIFE Performance for the quarter ended June 30, 2023 Private Market leadership in Ind. NBP of ` 40.6 billion with 18% growth and 26.8% market share APE stands at ` 30.3 billion 17% growth in Protection APE to ` 3.7 billion Value of New
Slide 3: Key ratios and business growth
Particulars Q1 FY 2024 Q1 FY 2023 YoY Commission ratio 4 4.0% 4.6% - Total cost ratio5 10.8% 11.2% - Persistency Ratios - Premium Basis (Regular Premium/ Limited Premium payment under individual category) 6 13th month persistency 85.0% 85.6% - 25th month persistency 76.1% 78.7% - 37th month persiste
Slide 4: Distribution network and cost efficiency
Distribution network The Company has strong distribution network of 289,162 trained insurance professionals consisting of agents, CIFs and SPs along with widespread operations with 996 offices across country. The Company has diversified distribution network comprising of strong bancassurance cha
Slide 5: Assets under management and financial position
Assets under Management AuM grew by 25% from ` 2,623.5 billion as on June 30, 2022 to ` 3,282.8 billion as on June 30, 2023 with debt-equity mix of 69:31. Over 94% of the debt investments are in AAA and Sovereign instruments. Financial position The Company’s net worth increased by 15% from ` 117
Slide 6: About SBI Life Insurance
Solvency Ratio: Solvency ratio means ratio of the amount of Available Solvency Margin to the amount of Required Solvency Margin as specified in form-KT-3 of IRDAI Actuarial Report and Abstracts for Life Insurance Business Regulations. Net worth: Net worth represents the shareholders’ funds and i
Slide 7: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', ‘expected to’, etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements in
Slide 8: Performance Update – June 2023
Performance Update – June 2023
Slide 9: Performance Update, Focus areas and initiatives, Industry Overview
1 Performance Update 2 Focus areas and initiatives 3 Industry Overview 4 Annexure 2
Slide 10: Performance Update
1 Performance Update 2 Focus areas and initiatives 3 Industry Overview 4 Annexure 3
Slide 11: Resilient business model creating long term value
Resilient business model creating long term value Trained Human Technological Capital Innovation 2.9 lacs 98.6% insurance individual applications personnel, focus on need submitted digitally based selling Diverse Financial Distribution Strength 996 offices with strong 2.15 times distribution channel
Slide 12: Business highlights for 1QFY24
Business highlights for 1QFY24 ` in billion ` 62.1 ` 30.3 ` 3.8 CAGR Growth CAGR Growth CAGR Growth +11% ` +45% 24% 18% +4% 1% ` New Business Premium New Business APE Profit after Tax ` 73.5 ` 26.7 ` 8.7 CAGR Growth CAGR Growth 22% +28% 17% ` +3% Renewal Premium Individual Rated Premium Value of New
Slide 13: Continues to deliver on long term growth vision
Continues to deliver on long term growth vision in million ` in billion Individual Policies GWP 502.5 587.6 673.2 113.5 135.6 19% 2.2 1.9 1.7 377.3 333.0 28% 296.3 73.5 1% 57.6 86.8 89.6 21.5 0.4 0.4 81.3 21.6 165.0 209.1 40.6 18% 125.0 34.3 FY 21 FY22 FY23 Q1 FY23 Q1 FY24 FY 21 FY22 FY23 Q1 FY23 Q1
Slide 14: Stable distribution mix and driving balanced product mix
Stable distribution mix and driving balanced product mix ` in billion Channel Mix NBP Individual NBP 206.2 254.6 295.9 55.9 62.1 125.0 165.0 209.1 34.3 40.6 7% 8% 10% 9% 13% 27% 29% 21% 19% 31% 28% 27% 23% 26% 21% 19% 19% 17% 18% 17% 60% 62% 65% 65% 67% 65% 66% 56% 53% 52% FY 21 FY22 FY23 Q1 FY23 Q1
Slide 15: Unparalleled distribution reach
Unparalleled distribution reach Pillars of distribution network Bancassurance Agency Institutional Alliance Direct & Corporates • 2,22,000+ Agents – 38% • 13,300+ Partner Branches • Top 3 in Industry in fund • 27,000+ SBI & RRB Bank Branches growth over last year business • 133 Brokers • 27% NBP sha
Slide 16: Product portfolio
Product portfolio ` in billion Product Mix1 Y-o-Y Mix FY 21 FY22 FY23 Q1 FY23 Q1 FY24 Growth Q1 FY24 Savings 105.7 137.8 157.5 27.3 27.1 (1%) 44% - Par 9.7 7.7 9.5 1.8 2.0 13% 3% - Non Par 10.5 17.0 36.7 7.9 5.7 (27%) 9% - ULIP 85.5 113.2 111.4 17.6 19.3 10% 31% Protection 24.6 30.5 36.4 7.0 7.8 12%
Slide 17: Wide product offerings
Wide product offerings Care free Protection Financial Security Child Education Wealth Creation Retirement Average Age 37 36 36 38 56 Share in policies 30% 27% 7% 26% 10% The product list is only indicative & not exhaustive 10
Slide 18: Cost efficiency, Profitability & Value
Cost efficiency, Profitability & Value ` in billion Opex Ratio : Maintaining Cost efficiency Profit after Tax : Consistent growth in profit Total Cost Ratio1 8.3% 8.8% 9.6% 11.2% 10.8% 100% 20.0 17.2 6.6% 6.8% 15.1 14.6 80% 15.0 4.8% 5.1% 5.1% 60% 10.0 40% 5.0 3.8 20% 2.6 0% - FY 21 FY22 FY23 Q1 FY2
Slide 19: Strong focus on customer service
Strong focus on customer service Persistency1 85.2% 85.5% 85.6% 85.0% 78.1% 75.6% 78.7% 76.1% 72.1% 74.5% 72.2% 74.8% 69.9% 70.3% 70.3% 70.4% 55.6% 56.7% 49.5% 50.3% 13th Month 25th Month 37th Month 49th Month 61st Month FY 22 FY23 Q1 FY23 Q1 FY24 Surrender Ratio2 Unfair Business Practice3 5.1% 5.8%
Slide 20: Value of New Business Movement
Value of New Business Movement ` in billion VoNB margin stands at 28.8% VoNB Margin 30.4% - (1.2%) 0.7% (1.1%) 28.8% 0.4 (0.4) (0.3) 0.2 8.8 8.7 Opening VoNB as on Q1 Impact of Business New Business Mix & Change in Operating Change in Economic Closing VoNB as on Q1 FY23 Volume Profile * Assumptions
Slide 21: Asset under Management
Asset under Management ` in billion AuM – Linked | Non Linked Composition of Asset under Management 2,209 2,674 3,073 2,623 3,283 Equity 3% 88:12 90:10 92:8 92:8 92:8 2% 47% 47% 47% 48% 46% Government securities 31% 30% Fixed deposits ` 3,283bn Debentures and bonds 59:41 53% 54:46 53% 52:48 53% 55:4
Slide 22: Focus areas and initiatives
1 Performance Update 2 Focus areas and initiatives 3 Industry Overview 4 Annexure 15
Slide 23: Key Focus Areas
Key Focus Areas ❖ 2.2 mn customers served using WhatsApp ❖ 996 offices (39% in rural & semi urban Widespread distribution network & services areas) & 40k+ branches of distributors product suite to cater different needs ❖ TMT at home through Paddle TMT ❖ 34 individual & 9 group products to cater diff
Slide 24: Digital Ecosystem
Digital Ecosystem Deploy AI and Machine Learning Customer <10 On-Boarding process mins Ensure Data security Gen Ai Digital KYC Talent Reduction in Non 67% Acquisition Prospecting 29% medial Issuance TAT 22,015 289k+ Employees Distributors Ensure Talent Reduction Reduction in medial Insta PIWC On – B
Slide 25: Accelerating Digital Transformation
Accelerating Digital Transformation Digital Ecosystem ❖ 914 varied product Robust Agile ❖ 24*7 VDI / VPN features built in PMS Scaling digitally aided to connectivity to enable ❖ 21 Products in Group support growth in NBP & ❖ Partner integration YONO WFH for all employees policy system ❖ 40+ Digital
Slide 26: Accelerating Digital Transformation
Accelerating Digital Transformation 231k+ 500k+ 85k+ 616k+ new lives with Downloads Active Users Downloads 291% premium With 1.5mn+ With 0.5mn+ growth document upload Proposal count Smart Smart Care YONO M-connect Advisor 59k+ Credit life 1.4mn 32.3mn 243k+ Proposal Queries resolved Members Claims S
Slide 27: Industry Overview
1 Performance PerformanceUpdate Update 2 Focus areas and initiatives 3 Industry Overview Performance Update 4 Annexure 20
Slide 28: India Life Insurance - Structural Growth Drivers in Place
India Life Insurance - Structural Growth Drivers in Place Composition of Population1 India’s share of urban population2 Life Insurance DensityUS$3 5414 52.8% 46.4% 6.6% 8.6% 40.1% 13.8% 34.9% 30.9% 49.3% 52.4% 54.2% 1971 18.0% 16.1% 13.6% 26.2% 23.0% 18.5% 246 69 253 48 2020 2030 2050 2010 2020 2030
Slide 29: Life Insurance – Significant Under Penetration versus other Markets
Life Insurance – Significant Under Penetration versus other Markets Underpenetrated Insurance Market Premium as % of GDP – 20211 Protection gap highest amongst peers2 Sum Assured as % of GDP3,4 7.5% 83% 332% 5.8% 76% 71% 70% 252% 251% 55% 55% 3.9% 3.2% 153% 143% 2.1% 127% 85% 1.1% Singapore South Ma
Slide 30: Protection – the next growth driver
Protection – the next growth driver Scope of Protection business Addressable Population1 Mortality Protection Gap (in US$ trillion)1 35.6 Population of India 1320 Mn Bank Accounts 26.8 1050 Mn PAN Card 440 Mn 16.5 Tax Return 59 Mn 8.5 MF Investor 5.5 21 Mn Insured 2009 2014 2019 2025e 2030e 6 Mn • L
Slide 31: Retirement solutions - Annuities
Retirement solutions - Annuities Scope of Annuities business Pension Assets/GDP ratio1 (2021) Ageing Population2 Life Expectancy at 603 213.3% 9% 19% 22 22 152.6% 20 19 18 17 62% 62% 72.2% 59.8% 29% 5.8% 19% Netherlands USA Japan Hongkong India 2015 2050 2000-05 2011-12 2030E Age < 15 yrs Age 15-59
Slide 32: India’s Growth Prospects & Financialization of Savings
India’s Growth Prospects & Financialization of Savings Increasing in Financial Savings 6.7% Fastest growing G20 Economy3 Share of Life Insurance in Financial Savings1 Average annual real GDP growth 5.0% 4.3% 7% 3% 3% 2% 6% 3.0% 2.6% 2.4% 2.0% 26% 37% 37% 40% 27% 1.9% 1.8% 1.7% 17% 17% 17% 16% 18% In
Slide 33: Industry Composition
Industry Composition Product portfolio1 Industry Private Players 13% 11% 10% 11% Higher ULIP contribution 13% 38% 34% 29% 29% 44% among private players, though traditional 87% 87% 89% 90% 89% products forms the major 62% 66% 71% 71% 56% share of new business FY 18 FY 19 FY 20 FY 21 FY 22 FY 18 FY 19
Slide 34: Annexure
1 Performance PerformanceUpdate Update 2 Focus areas and initiatives 3 Industry Overview Performance Update 4 Annexure 27
Slide 35: Annualised Premium Equivalent (APE)
Annualised Premium Equivalent (APE) ` in billion Y-o-Y Mix Segment FY 21 FY 22 FY 23 Q1 FY 23 Q1 FY 24 Growth (Q1 FY24) Individual Savings 94.6 118.7 139.8 23.6 23.8 1% 78% - Par 9.7 7.5 9.5 1.7 2.0 14% 7% - Non Par 10.7 17.1 37.5 8.2 5.8 (29%) 19% - ULIP 74.2 94.1 92.9 13.6 15.9 17% 53% Protection
Slide 36: Individual Annualised Premium Equivalent (APE)
Individual Annualised Premium Equivalent (APE) ` in billion Y-o-Y Mix Channel Segment FY 21 FY 22 FY 23 Q1 FY 23 Q1 FY 24 Growth (Q1 FY24) Participating 2.8 1.9 3.4 0.6 0.9 35% 3% Non Participating 13.7 19.7 31.1 6.6 5.7 (14%) 21% Bancassurance Unit Linked 52.6 65.8 69.7 10.2 12.0 18% 44% Total 69.1
Slide 37: Sensitivity Analysis
Sensitivity Analysis Scenario Change in VoNB % Reference Rate +100 bps (1.1%) Reference Rate -100 bps 1.0% Decrease in Equity Value 10% (0.2%) Proportionate change in lapse rate +10% (2.7%) Proportionate change in lapse rate -10% 3.4% Mortality / Morbidity +10% (5.3%) Mortality / Morbidity -10% 5.4%
Slide 38: Environment, Social & Governance: Environment
Environment, Social & Governance : Energy Water Recycle Other Management Management & Reuse Initiatives • Corporate office building • Drinking Water of • 240 kgs per month paper • 99% new business is a Green Building; previous office day waste generated (old proposals logged certified by Indian Gree
Slide 39: Environment, Social & Governance: Social
Environment, Social & Governance : Social Employee wellness Skill Customer Social & people practices Development Centricity Inclusion • Work from Home policy • 136 modules created to enhance • CSR policy & Corporate Social knowledge and skills • Customer Surveys (Net Promoter Responsibility Committe
Slide 40: Environment, Social & Governance: Governance
Environment, Social & Governance : Risk Management & Board Governance & Business Continuity Information Security Code of Conduct & Diversity framework framework Regulatory framework • >60% Independent Directors on • Risk management practices • Aligned to ISO 27001 – ISMS • Well defined Code of Condu
Slide 41: Customer Age and Policy Term
Customer Age and Policy Term1 Average customer age in years Average policy term in years Par 36 Par 19 Protection 37 Protection 13 ULIP 41 ULIP 13 Non Par - Others 41 Non Par - Others 30 Overall 39 Overall 17 34 1. Age and term for individual products for Jun 23.
Slide 42: Revenue and Profit & Loss A/c
Revenue and Profit & Loss A/c Particulars FY22 FY23 Q1 FY23 Q1 FY24 ` in billion Premium earned 587.6 673.2 113.5 135.6 Premium on reinsurance ceded (3.3) (7.3) (3.1) (4.5) Net premium earned 584.3 665.8 110.4 131.0 Investment income1 245.2 140.4 (62.3) 147.9 Other income 0.5 0.5 0.1 0.1 Total incom
Slide 43: Balance Sheet
Balance Sheet Particulars FY22 FY23 Q1 FY24 ` in billion SOURCES OF FUNDS Share Capital 10.0 10.0 10.0 Reserves and Surplus 104.2 119.2 123.1 Credit/(Debit) Fair Value Change Account 2.0 0.9 2.3 Sub-Total 116.2 130.2 135.4 Credit/(Debit) Fair Value Change Account 32.1 20.4 30.2 Policy Liabilities 1,
Slide 44: Abbreviations
Abbreviations Term Description Term Description GWP Gross Written Premium Opex Operating Expenses (excluding commission) NBP New Business Premium CAGR Compounded Annual Growth Rate NOP Number of Policies GDP Gross Domestic Product APE Annualized Premium Equivalent INR (`) Indian Rupees IRP Individua
Slide 45: Glossary
Glossary ⚫ New Business APE: The sum of annualized first year premiums on regular premium policies, and 10.00% of single premiums, written by the Company during the fiscal year from both retail and group customers. ⚫ New Business Premium (NBP): Insurance premium that is due in the first policy year
Slide 46: Disclaimer
Disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or purchase any securities of SBI Life Insurance Company Limited in India or in any other jurisdiction. This presentation is not intended to be a prospect
Slide 47: Thank you
Thank you Investor Relations Contact: SBI Life Insurance Co Ltd Fifth Floor, Natraj, M V Road & Western Expressway Highway , Andheri (E), Mumbai Dial - +91 22 6191 0281/ 0399 Email – [email protected] Website – www.sbilife.co.in 40