SBI Life Q3 net down 40% despite surge in investment, premium income

Net premium income up almost 18%, revenue from investment rises more than 3x

Private sector life insurer SBI Life Insurance has reported a 40 per cent decline in its net profit at Rs 232.85 crore in Q3FY21, from Rs 389.77 crore in the corresponding period of FY20 despite a robust investment income and healthy rise in premium income.

Net premium income earned by the insurer in the reporting quarter totaled to Rs 13,766.49 crore, up 17.71 per cent from Rs 11,694.51 crore in the Q3FY20. Its income from investment rose 213 per cent to Rs 12,776.91 crore in the October–December quarter of FY21, compared to Rs 4,073.26 crore in the corresponding period of FY20.

While solvency ratio improved marginally year on year but sequentially it dropped to stand at 2.34, against the regulatory requirement of 1.5.

“The company has assessed the overall impact of this pandemic on its business and financials, including valuation of assets, policy liabilities and solvency for the period ended December 3I, 2020”, it said.

Based on that, it has kept additional reserves to the tune of Rs 70 crore due to the pandemic, which is over and above the policy level liabilities calculated based on prescribed IRDAI regulations. “The company will continue to closely monitor any future developments relating to covid19 which may have any impact on its business and financial position”, it further said.

In the first nine months of the current financial year (9MFY21), it earned a net profit of Rs 920 crore, up 4 per cent year on year and its net worth increased 19 per cent to Rs 10,130 crore. Assets under management of the insurer increased 28 per cent to Rs 2.09 trillion in the same period. However, the value of new business was down 5 per cent in 9MFY21 at Rs 1,560 crore, compared to Rs 1,650 crore in 9MFY20. New business margin of the insurer stood at 20.8 per cent in the same period.

The 13th month persistency ratio of the insurer, based on premium, stood at 86.17 per cent and the 61st month persistency stood at 61.69 per cent. Shares of the insurer were trading 1.92 per cent lower at Rs 862.40 at the BSE.