The Profit after Tax (PAT) of SBI Life, the second largest private sector life insurers, on the basis of the market share, grew by 7% to Rs 1,420 crore in FY 2020 from Rs1,330 crore in FY2019.
The life insurer, with a 6.41 per cent of market share, increased its gross written premium(new and renewals) by 23 per cent to Rs 40,630 crore in FY 2020 mainly due to increase in new business premium (NBP) by 20 per cent from Rs 13,790 crore in FY 2019 to Rs 16,590 crore FY 2020.
Individual New Business Premium of the company has increased by 17 per cent from `Rs 9,640 crore in FY 2019 to Rs 11,240 crore in FY 2020.
Value of New Business (VoNB) for the life insurer increased by 17 per cent to Rs 2,010 crore in FY 2020. Value of New Business ( VoNB) margin of the company increased from 19.8 per cent in FY 2019 to 20.7 per cent in FY 2020 (with effective tax rate). There has been a 102 bps increase in VoNB margin to 18.7 per cent.
VoNB is the present value of expected future earnings from new policies written during a specified period and it reflects the additional value to shareholders expected to be generated through the activity of writing new policies during a specified period.VoNB Margin is the ratio of VoNB to new business Annualized Premium Equivalent(APE) for a specified period and is a measure of the expected profitability of new business.
APE of the life insurer has increased by 11 per cent from Rs 9,700 crore in FY 2019 to Rs 10,740 crore in FY 2020. APE is the sum of annualized first year premiums on regular premium policies, and 10 per cent of single premiums, written by the company during the fiscal year from both retail and group customers
The company, during the reporting period, has registered growth in savings and protection business reflecting balanced product mix.
Total protection new business premium of the company has increased by 27 per cent from Rs 1,6400 crore in FY 2019 to Rs 2008 crore in FY 2020. APE of the life insurer has increased by 11 per cent from Rs`9,700 crore in FY 2019 to Rs 10,740 crore in FY 2020.
Assets under Management of the SBI Life has grown by 14 per cent from Rs 1,41,02 crore as on March 31, 2019 to Rs 1,60,036 crore as on March 31, The life insurer has a debt-equity mix of 79:21. Approx. 93 per cent of the debt investments are in AAA and Sovereign instruments.
The life insurer has mobilised 60 per cent its premium bancassurance channel, 20 per cent from agency channel, 20 per cent from other channels.
During the year ended March 31, 2020, the Company has classified its investment in Dewan Housing Finance Ltd. (DHFL) bonds as NPA on account of default in interest and principal repayment of nonconvertible debenture (NCDs). The Company has made 100% NPA provision of Rs 53 crore on the said bonds in unit linked portfolio.