Shares of SBI Life Insurance gained 4 per cent to hit a 52-week high of Rs 965 on the BSE in intra-day trade on Tuesday after reporting impressive growth (more than 60 per cent) in new business premiums (NBP) in the month of February. NBP is the premium acquired from new policies for a particular year. The stock surpassed its previous high of Rs 954.65, touched on January 8, 2021. It hit a record high of Rs 1,030 on October 30, 2019.
February 2021 saw life insurers recording impressive 21 per cent growth in NBP to Rs 22,425 crore, compared with Rs 18,533 crore in the same period, a year ago. Life Insurance Corporation of India (LIC) recorded 24 per cent growth in NBP to Rs 12,921 crore, compared with Rs 10,405 crore. Private insurers, on the other hand, saw their NBP growing 16 per cent in February to Rs 9,505 crore, compared with Rs 8,129 crore YoY.
“SBI Life posted a strong rebound (around 53 per cent YoY) in individual weighted received premium in (WRP) February 2021 after showing muted trends for many months. Total un-weighted premium grew 61.8 per cent YoY,” Motilal Oswal Securities said in insurance sector update.
During FY21 year to date, SBI Life (14 per cent) remained the largest private Insurer in terms of Individual WRP. On an un-weighted basis, the company was also the largest Private Insurer with a market share of 7.7 per cent, the brokerage firm said.
“Pandemic has led to surge in demand for protection business; the same is expected to stabilize ahead. Post sluggish business in 1HFY21, credit life business is set to increase as disbursement pick up ahead. Apart from protection, the insurer plans to focus equally on distribution of participating and non-participating (including annuity) products. Going ahead, proportion of protection and non-unit linked business is expected to increase leading to healthy VNB margin ahead of 18 per cent,” analysts at ICICI Securities said in SBI Life's December quarter results update.
Strong distribution (banca as well as agency) channel to enable pedal business growth with limited traction on opex. Such operationally efficiency and steady persistency is expected to further aid profitability. We continue to remain positive on businesses with long term growth potential and relatively lower balance sheet risk, the brokerage firm said.
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