BackSBI Life Insurance jumps 5% as company reports 16% YoY rise in Q4 net profit
Net premium earned rose 4.7% year-on-year to ₹11,862.98 crore in the quarter ended MarchFor FY20, net profit rose 7.2% to ₹1,422.17 crore, while net premium earned jumped 22.6% to ₹40,324.01 crore
PremiumMUMBAI: Shares of SBI Life Insurance rose 4.7% after the company reported a 16% year-on-year increase in its January-March (Q4) net profit to ₹530.67 crore compared with ₹457.68 crore in the year-ago period.
At 2pm, the stock traded at ₹740, up 3.4% from its previous close, while benchmark Sensex was up 1% at 31778.08 points.
Net premium earned rose 4.7% year-on-year to ₹11,862.98 crore in the quarter ended March.
Annualised premium equivalent--a common sales measure for life insurers--declined about 13% year-on-year to ₹2,690 crore.
In a note brokerage firm Emkay Global Financial Services said “SBIL also depends heavily on bancassurance ( about 67% of distribution), which could trigger steady growth for ULIPs especially during H2FY19-20 as the overall equity market is seeing some stabilizing trends".
For the full year, net profit rose 7.2% to ₹1,422.17 crore, while net premium earned jumped 22.6% to ₹40,324.01 crore.
Value of new businesses, used to measure profitability of the new business written in a period, increased 17% to ₹2,010 crore in FY20, while margin expanded 100 bps year-on-year to 18.7% for FY20.
The company witnessed some slowdown in persistency during April, which is a factor that could impact growth in FY20-21.
"Though persistency trends have generally held up for FY19-20, witnessing improvement across cohorts, we think that FY20-21 would be a challenging year in terms of maintaining the renewal pipeline. With customers going into cash conservation mode and a weak economic outlook, drop in persistency could be a risk," said Nirmal Bang Securities in a note to clients.
SBI Life provided around ₹53 crore for its exposure to debt-ridden mortgage lender Dewan Housing Finance bonds in its unit-linked portfolio.
The company's assets under management grew to ₹1.60 trillion as on 31 March 2020 from from ₹1.41 trillion a year ago, with a debt-equity mix of 79:21.
Approximately 93% of the debt investments are in AAA and sovereign instruments.
SBI Life Insurance Company is one of the leading life Insurance companies in India. The company has a distribution network of 186,495 trained insurance professional and widespread operations with 937 offices across the country.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
