Good evening, everyone. We are happy to welcome you all to the results update call of SBI Life Insurance for the period ended December 31st, 2024. We appreciate and thank you wholeheartedly for your time and efforts attending our earnings call. Updates on our financial results can be accessed on our website as well as on the websites of both the stock exchanges. Along with me, Sangramjit Singh Sarangi, President and CFO, Abhijit Gulanikar, President, Business Strategy, Subhendu Bal, Chief Actuary and Chief Risk Officer, Prithesh Chaubey, Appointed Actuary, and Smita Verma, Senior Vice President, Finance and Investor Relations, are present. As we reflect on our results for this quarter, we would like to begin by acknowledging that Q3 2023 was an exceptionally strong period, setting a very high benchmark for us.
Despite the high base from last year's Q3, we are pleased to report that the company has continued to perform well. Not only did we manage to sustain our momentum, but we also achieved growth. During the quarter, December month's new business premium was one of the highest-ever collections for the company. This speaks volumes about our team's resilience, adaptability, and commitment to delivering strong results, regardless of the high benchmark we set last year. I am pleased to share that we have seen progress in several key areas as compared to the previous corresponding period, demonstrating the strength and dedication of our teamwork. We are building a strong base by improving the agency and banca productivity levels. By leveraging customer insights and industry trends, we have created solutions that provide enhanced coverage, greater flexibility, and more tailored options, ensuring that we continue to deliver exceptional value.
I am delighted to share that, as per our ongoing commitment to meet the evolving needs of our customers, during the month of December, we have successfully added one more product in our Platinum series, that is Smart Platina Supreme, a non-participating guaranteed savings product which provides a stable, guaranteed income stream, ensuring financial security, and it is for any life stage. The initial response has been encouraging, and the company collected more than INR 2.5 billion of premium under this product within a span of 20 days. Moving forward, we remain committed to continuously assessing and refining our offerings, ensuring that we are well equipped to meet the dynamic demands of our customers. We recognize that staying attuned to customer preferences and market trends is essential for our continued success. Now, let me give you some key highlights for the period ended 31st December 2024.
New business premium stands at INR 262.6 billion and maintained private market leadership with a share of 22.4%. Individual new business premium stands at INR 198.6 billion with a growth of 12% and private market share of 27.8%. For Q3 FY 2025, the company's individual new business premium grew by 10% as compared to industry growth of 6%. Gross return premium stands at INR 609.8 billion with a growth of 9%. Protection new business premium stands at INR 27.9 billion. Profit after tax stands at INR 16 billion with a strong growth of 48% over the corresponding period last year. Value of new business stands at INR 42.9 billion. VNB margin stands at 26.9% for the period ended December 31st, 2024. Embedded value of the company as of December 31st, 2024, stands at INR 681.4 billion, registering a growth of 17% over March 31st, 2024.
Our Assets Under Management stands at INR 4.42 trillion with a growth of 19% over the corresponding period last year. Solvency ratio of 2.04 as against the regulatory requirement of 1.50. We will now update you on each of the key parameters in detail. Let me start with the premium. Individual new business premium has grown to INR 198.6 billion with a growth of 12% over the last period. The company's private market share stands at 27.8%, and industry market share stands at 17.4%. For the 3rd quarter FY 2025, the company's individual new business grew by 10% as compared to industry growth of 6%. On individual rated new business, we stand at INR 145.5 billion with a growth of 14% over the last period and maintaining our leadership position with a private market share of 25.3% and a total market share of 17.8%.
The company's three-year CAGR of IRP, that is individual rated new business premium, stands at 17%, outpacing the industry CAGR of 13%. This is on the backdrop of consistent growth in performance which the company delivered year- on- year. We have witnessed some headwinds in group business, particularly with our group savings products. Group new business premium stands at INR 64 billion with a contribution of 24% in new business premium. Having said that, we have collected total new business premium of INR 262.6 billion. The company's private market share stands at 22.4%, and total market share stands at 9.5%. The company's five-year CAGR of new business premium stands at 15%, outpacing the industry CAGR of 7%. Renewal premium grew by 15% to INR 347.3 billion, which accounts for 57% of the gross written premium. To sum up, gross written premium stands at INR 609.8 billion with a growth of 9% over the corresponding previous period.
In terms of APE, premium stands at INR 159.7 billion, registering a growth of 11%. Out of this, individual APE stands at INR 147.3 billion with a growth of 14%. During the period ended December 31st, 2024, a total of INR 15.88 lakh new policies were issued, that is INR 1.58 million. The number of lives covered during the period ended December 31st, 2024, is INR 18.4 million. The growth in sum assured serves as a positive indicator of consumer confidence and the increasing awareness of the importance of financial protection. This upward trend reflects a shifting mindset among individuals who recognize the need for comprehensive coverage to safeguard their future. Individual new business sum assured registered a growth of 33% over the corresponding previous period, and the quarter-to-quarter growth was at 46%.
Let me give you details about the product mix. As of December 24th, our guaranteed non-par saving products are contributing 18% on an individual APE basis. Individual unit new business is at INR 127.4 billion with a growth of 25% over the corresponding last period and constitutes 64% of individual new business. The growth in unit can be attributed to the movement in equity markets. The trend is evident across the industry as more customers seek products that blend investment opportunities with protection. Individual protection new business is at INR 5.2 billion. Individual protection business for Q3 FY 2025 has grown by 12% on an NPV basis as compared to Q2 FY 2025. Group protection new business stands at INR 22.7 billion. Credit life new business has grown by 8% and stands at INR 17.3 billion. Protection business contributes 8% of APE and stands at INR 13.5 billion.
Retirement plans assist customers in building a substantial corpus of funds to maintain the desired lifestyle and manage expenses in their golden years. Total annuity and pension new business underwritten by the company is INR 53.1 billion. Moving to update on distribution partners, with the strength of more than 57,000 CIFs, SBI and regional rural banks' bancassurance business contributes a share of 63% on total APE basis, and on individual APE basis, it stands at INR 97.2 billion with a growth of 8%. SBI branch productivity on individual APE terms stands at INR 5.5 million for the period and registered a growth of 9%. As mentioned in our last quarter's call, the digital channel within SBI Bank relationship is garnering good numbers of customers, and during the quarter, it attracted more than 50,000 customers opting for protection policies through self-initiated journey.
With the enhanced focus on agency channel and strategic launch of Agency 2.0, we have witnessed impressive strides in agent activation, agency channel productivity onboarding of new agents, and better collaboration between agents. Our agent productivity for the period stands at INR 2.9 lakh on individual NPV terms, registering a growth of 27% over the corresponding previous period. Agency registered new business growth of 36% over the corresponding previous period and contributes 26%. Agency channel individual APE showed a growth of 31% over the last period and stands at INR 44 billion. As of December 31st, 2024, the total number of agents stands at 241,251. During the period ended December 24, the company added more than 75,000 agents on gross basis. As part of our strategic initiative to strengthen our presence across the country, we have opened 46 new branches this year.
By the end of the financial year, we plan to add an additional 40 branches. The expansion is aligned with our vision to create infrastructure that supports the long-term development of our agency channel. Our expansion targets are carefully designed to cater not only to Tier 1 and Tier 2 cities but also to underserved Tier 3 and Tier 4 regions. All these steps have resulted in an increase in the share of agency channel in individual rated premium from 26% in the previous period to 30% in the current period. During the period ended December 31st, 2024, other channels, that is direct corporate agents, brokers, online, and web aggregators, grew by 26% in terms of individual new business premium. Linked business through other channels registered a growth of 53% on an APE basis. We are investing in building our online business channel.
Individual rated premium through this channel has grown by 71% for the current period as compared to the previous period of last year, and protection business through this channel on IRP terms grew by 23% as compared to the previous period last year. Coming to updates on profitability, the company's profit after tax for the period ended December 31st, 2024, stands at INR 16 billion, with a robust growth of 48% as compared to the previous corresponding period. Our solvency remained strong at 2.04 as against regulatory requirement of 1.50. Value of new business stands at INR 42.9 billion, with a growth of 6%. VNB margin stands at 26.9% for the period ended December 2024. The shift in VNB is mainly on account of an increase in the share of unit business as compared to the previous period.
Embedded Value for the company as of December 31st, 2024, stands at INR 681.4 billion, registering a growth of 17% over March 31st, 2024. Coming to operational efficiencies, our OpEx ratio stands at 5.3%, and the total cost ratio stands at 10.2% for the period ended December 31st, 2024. With respect to persistency of individual regular premium, the 13th month persistency stands at 86.10%, an improvement of 83 basis points, and the 61st month persistency stands at 63.29%, an improvement of 521 basis points. As mentioned in my opening remarks, Assets Under Management stands at INR 4.42 trillion as of December 31st, 2024, having a growth of 19%. Death claim settlement ratio stands at 99.3%. The company has registered an improvement of 44 basis points over the last period.
Our mis-selling ratio stands at just 0.03%, which is one of the lowest in the industry, and this is achieved through our consistent approach adopted to ensure right selling to the customers. Digitalization is transforming the life insurance industry, enabling us to deliver enhanced services and a more seamless experience for our customers. As we embrace this digital transformation, we remain committed to innovation and excellence, ensuring that we stay ahead in an increasingly competitive landscape. The company continues efficient usage of technology for simplification of processes, with 99% of the individual proposals being submitted digitally. 50% of the individual proposals are processed through automated underwriting. To conclude, by fostering a culture of resilience and continuous improvement, supported by a clear focus on developing agency channel along with the partner bank network, we are confidently positioned for the future.
Our commitment to exceptional customer service strengthens client relationships and reinforces our status as a trusted leader in the market. With a focus on long-term, sustainable, and profitable growth, we aim to create lasting values for our customers, shareholders, and communities, paving the way for a prosperous future together. Thank you all, and now we are happy to take any questions that you may have.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Avinash Singh with Emkay Global. Please go ahead.
Yeah. Thanks for the opportunity. Good set of numbers, particularly considering the backdrop. A few questions. The first one would be more that now, I mean, of course, we have crossed the nine months, so there should be more clarity around what's happening with your main channel and channel bank, SBI Bank, and also how the agency is performing. So if and also the impact of surrender regulation, of course, it is known in reported numbers. So if you can just sort of provide your guidance regarding growth and margin for the full year FY 2025, and related to that, if you can just try to quantify if at all there was some impact from this product refiling under new surrender regulations. That's the question number one. Second would be agency, of course, the addition and deletion are kind of pretty regular.
But if I see particularly this quarter, somehow agency deletion seems to have picked up, I mean, nearly 50 or 1,000. So addition is like a 25,000 per quarter that has been happening for the last three quarters, but deletion has certainly picked up in Q3. So what is going on there with the agency, if you can just sort of provide more color? And lastly, one more. Protection side, again, I see that individual protection, the decline had kind of nearly arrested more or less quarter has been flat YoY basis. And if we understand the pickup with the product like a Smart Platina Supreme, and that product targeted bank customer is good. But I think the premium growth for individual protection is not kind of still coming into positive.
If you can just help understand if there is a significant change in regular protection with a return of premium product on a year-on-year basis? Thank you.
First of all, thanks for congratulating on our numbers. Your first question about the growth, Banca, and agency. So you would have noticed that our growth for the first nine months is in line with the kind of guidance that we had at the end of the 2nd quarter of the 1st half year when we said that we will be growing somewhere around 15%, and on IRP basis, that growth is more or less there. On both the channels agency as well as Banca, the growth is more or less in line with the targets that we had taken for the year.
Banca channel grew by almost 10% in the first nine months, whereas agency channel is growing by almost 29%-30% in the first nine months. For the remaining period, also, we expect the growth to be in the same range. Overall basis, we continue to stick to our guideline of 15% on IRP basis. Your second question was regarding the number of agents. Addition, as you said, is around 75,000, but net addition is less because the deletion for the period is a little higher. The basic reason behind that is that the company has changed the definition of active agents. Now, with the stricter enforcement of the activation guideline, we have deleted a large number of agents who were not active as per the company's definition during the quarter. That number is approximately 42,000-45,000 during this quarter.
So going on, this was a one-time exercise. And going on, we will continue to stick to this definition only. So going forward, the net addition numbers will be better. Coming to protection, we have seen a shift towards pure protection products as compared to the return of premium policies. Now, 63% policies are in the protection segment. That means, I mean, 63% policies are with the return of premium, whereas the pure protection has increased to 37%. And that is being reflected in our product portfolio now.
Yeah. Thank you. And if you can just sort of provide some color on any impact from this surrender revision changes on the margin, because, I mean, in the margin work, of course, I mean, that part might be included somewhere in the operating incentive changes or something. So if you can just help understand if there was any impact from the surrender revision changes?
Yeah. So all our products have been relaunched with the new guideline of first-year surrender. But one quarter is a very, very short period to have any kind of experience and any kind of margin impact on overall company basis. We will see how this surrender in the first year pans out and how it affects our margins.
Just to also add that what we have mentioned earlier as well, that our impact, even potential impact, is very minimal. We don't see much impact coming on account of the surrender value.
Okay. Thank you, for the color.
Thank you. Next question comes from the line of Shreya Shivani with CLSA. Please go ahead. Yeah.
Thank you for the opportunity. My first question is on the individual protection.
We had mentioned in the last quarterly call that we've launched the Three Click product on YONO, and that should see better growth in the quarters to come. While there is a good quarter-on-quarter pickup, I wanted to understand, is it far more difficult to scale up a product just on YONO app, or is this product also available in other channels? I wanted to understand some color around this product and whether the margins of this product are higher or weaker than our earlier versions of individual protection products that we have. Second is just an update on the Banca channel. There was quite a bit of noise around the mis-selling or the concentration risk, etc., on this channel. We had also noticed that the regulator had set up a task force on the Banca channel in October 2023.
So if you can give us any update of what came out of it, any commentary that any interactions that you've had, and how should we look at this channel? I understand you've given us a good guidance that it should pick up, but from the regulator's point of view and the different task forces that have been set up around it, what's going on, if you can help us with it? Thanks.
So first, talking about the individual protection product on the YONO platform that we were talking, which we informed last analyst call, and which you were referring to. So this product, we are happy to say that contrary to your perception that it is difficult to sell. In the last four months, we have been able to sell more than 70,000 policies of this product, almost 73,000 as of date.
One thing that we have noticed here is that in the earlier question, I responded also that in this particular product, we are seeing a good growth in pure protection policies in place of the return of premium policies. That has improved our sum assured. Of course, the ticket size in pure protection is much lesser than the return of premium product. So it is not reflecting on the total premium side, but the number of policies. And overall, we are happy the way this product is faring. Talking of Banca channel, you are right that there is a lot of noise in the market, but as of date, we have not heard anything from the regulator on this particular subject. And I would like to emphasize that IRDA always had a consultative kind of approach on every subject.
Whatever they have done, they have done it after floating a paper, circulating draft guidelines, taking industry review, and then only they have decided on anything. On Banca channel, we have not received any consultation paper or any task force that you were talking about. We have not heard about that. So it is all around in the market, but nothing concrete as of date from either the regulator or from the ministry side.
So the task force, actually, there was a document on the IRDAI website. I know it's old. It's back in October 2023. And there were other life insurers who said they are the representatives who are going to be a part of the task force. I saw that SBI Life was not mentioned there. So, I mean, it seems a little confusing, right? Because it's not just that in the media they have said a year before they started speaking in media, they had also put out this document on their own website. So then it adds to the fire, unfortunately. I mean, it adds to the confusion, unfortunately. That's why these questions are coming up.
So, I mean, in the recent past, we have not heard anything on this subject from the regulator, and that is what we stand by as of date. Having said that, whatever guidelines will come in, we will definitely go along with those guidelines. And we, as you must have noticed, we are also focusing on our agency channel to take care of any contingency. But as of date, there is no such thing in the discussion .
Got it. Thank you very much for answering my question.
Thank you. Next question comes from the line of Supratim Datta with Ambit Capital. Please go ahead.
Thanks for the opportunity. My question is, on the agency side, I understand you have laid out certain plans that you want to do this year. But if I have to take a five-year view, by when do you think agency can go up to around 50% contribution to the overall APE? And what all building blocks we would need to put in place for agency to contribute 50%? If you could give us some color on that. And then in that, what would be the Banca growth then we'll have to build in? If you could give us some color on that, that would be very helpful. That would be my first question.
Then, on the Banca growth, when do we think the Banca growth will get ramped up and get closer to the overall APE growth that we are delivering? Currently, it's still in the single digit. So by when do we think that gets up to the double-digit figure that we used to do one year back? And again, what all will be the drivers of that? If you could give us some color on that. And lastly, coming to the product, new products, you launched a new product on the non-Par side recently. If you could give us some color on that, how that has tracked in December, if you could give us, and how do you see that play out over the remainder of the year?
And two, given ULIPs has been a key driver of growth, and we are entering a cycle where the overall equity market growth might be muted. In that scenario, what would be the key products that we would be focusing on to drive growth? If you could give us some color on that, that also would be very helpful. Thank you.
So if you look at our distribution mix, the overall Banca contribution is much higher than the agency. And if you are talking about 50% agency share, then obviously, agency growth will be higher than Banca growth. So we cannot have a situation where Banca growth is in line with the overall APE growth, and agency share is also growing. That itself becomes contradictory. We have identified a lot of opportunities on the agency side, and we want to take advantage of that.
That is why we are strengthening our agency channel by opening more number of branches, employing more agents, increasing agent productivity and all. That is already getting reflected in our first nine months' number. Going forward also, we will keep on adding more branches and more agents and have a higher agency growth. Banca growth at 10%, I will say, with the kind of base that we have, is pretty satisfactory. With the very strong partner bank with us, we will continue to explore all kinds of opportunities. I already informed in the last analyst call also that in addition to the CIF network, we are also developing the alternate digital channel on the Banca side.
As I already informed, with one product and more than 70,000 policies in the first year, we are pretty confident that this channel will also start contributing in a bigger way in coming times. We stand by our overall growth forecast in the medium term of 15%-17%. With the kind of growth in the Banca channel, let's say 10% and agency channel at 30% plus. Talking of, will you like to take that product? Yeah. Sangram. Product we have launched in this quarter, which is Smart Platina, which is on the non-par side, and which has done very well. We expect that this momentum will continue into this quarter. But yes, subject to the kind of rate of interest, which is expected to come by from the RBI. But at this moment, it is going as per expectation.
We expect that it will continue the same momentum in this 4th quarter of FY25. As for agency, you have mentioned about the market going down, and it will have some impact. The last three months, the market correction has happened, but we have not seen any kind of connection between the market going down and the ULIP business going down. Because similarly, if you have seen already in the SIPs where mutual funds have been increasing month- on- month, the last three months consistently. We don't see any kind of challenge for the ULIP per se. Because the experience and the past, the number shows that whenever the market is getting corrected, ULIP doesn't get any much impact per se. That is the right opportune time for the customers to invest because you get a lower NAV.
Subsequently, by the time of five-year to seven-year horizon, you get a better opportunity for a good return. So we don't see any challenge for us as far as ULIP is concerned.
Got it. Sangramjit, if you could tell us what is the APE of the Smart Platina in December, if you could give us some color on that, that would be helpful.
INR 250 crores is the number. I think it is there in our opening remarks. Approximately INR 250 crores in the month of December. December.
Got it. Okay. Thank you.
Thank you. Next question comes from the line of Prayesh Jain with Motilal Oswal Financial Services Limited. Please go ahead.
Yeah. Hi. Good set of numbers. Just one question is on the SBI channel. We saw, I think, a decent growth coming back in this quarter.
What different did we do in this particular quarter as compared to the 1st half where we had seen some slowdown? Extending that question, the YONO sales, the sales on YONO app, do they classify under SBI Bank itself? And what about the other group companies of SBI, like SBI Securities or any other companies that kind of sell the products of SBI Life? Would they be classified in as? This would be my first question.
Yeah. So YONO product does get classified under the Banca channel. But the other group company, that is SBI Securities, they are our corporate agent. That sales is very small in volume, and that does not get classified under the Banca channel. That is under corporate agent channel. Yeah. Regarding growth, I mean, even if you look at the three quarters of this financial year, the 1st quarter was pretty strong.
3rd quarter was pretty strong. So one quarter growth, two or three% here or there, does not matter much. These kind of things do keep happening. But overall, growth trend is intact, and we stand by that.
And just to this Banca channel, do you plan to tie up with more banks and diversify your product or distribution mix further with respect to the Banca channel in particular? What is the strategy there?
So we are always on lookout for good partners, and it is an ongoing process. Wherever we get good partners at the mutually acceptable terms, we will definitely be onboarding. So there is no embargo on that, or there are no additional efforts also on that. It is a normal business practice of the company.
And product-level margins, how would they have behaved this quarter? And particularly on ULIPs, the profitability, how would it have moved in this quarter?
Prithesh, please.
I think there is not much significant on the margin. So margins remain even the past level, more or less similar to that, except in the case of the Non-Par ROP protection. Because as you know, we have repriced most of the Non-Par product in the Q2. And Q1, fall of interest rate will pass on to the customer. And that's fully reflected in Q3. So if you look into the Q3 product-level margin, there is an enhancement coming from. Also, we have launched some protection riders that attach to the saving product, and the attachment rate is quite encouraging. So that also helping us to enhance the product line margin. So more or less, product line margin in the product line is similar, particularly to the unit-linked product.
I think margin is as per our earlier expectation as well. Not much changes on that side.
Last question. If you are guided for a 15%-18% kind of a growth, that would be on APE basis, right? And what would be your guidance or outlook on VNB growth per se?
We are expecting individual APE growth of around 15%-17%. And the VNB will be in the range of around the current rate, which is going out around single digit, or will be around 10%.
Value of new business growth rate will be lower than individual APE growth? That is what you're saying.
It all depends. Most likely, ideally, it should be similar to the APE growth. If you look at our base, our base is much higher, and our target for growth is also much higher.
Growing to a higher base with higher growth rate with the same range of margin is a bit difficult task. So what we are saying that there is a rationalization already happened. We need to report the margin of 31%. We have fallen to the 27%. Our objective is to maintain the margin in range of 27%-29% kind of thing. To that perspective, we are saying that there is a possibility that our VNB growth might be slightly lower than the APE growth.
This is for FY 2025?
2025 will be definitely slightly lower, but going forward, it will be longer. Because even this year, already we grew by 14%. VNB growth is 6%. So next three months, we can't compensate that. But my guidance is in the longer-term perspective. In ongoing basis, we expected to maintain this margin and grow on that level.
Got it. So longer-term, 15%-17% individual APE growth, and VONB margin range of 27%-29%, right?
Yeah. That's correct.
Right. Got that. Thank you so much, and wish you all the best.
Thank you. Next question comes from the line of Dipanjan Ghosh with Citi . Please go ahead.
Hi. Good evening, everyone. Just a few questions from my side. First, if I look at the embedded value between the 3rd quarter and the 2nd quarter, there seems to be a significant decline. So if you can kind of, and I would assume this would be because of the equity market movements. If you can just break that up, I know you give it on an annual basis, but if you can just give some color on the EV movement and if there were any assumption changes or operating variance on the negative side.
And if it was investment variance, if you can break it up between equity and debt. Second would be your non-PAS growth through the agency was quite strong during the quarter. So is it a function of both term and pure non-PAS, and whether most of it was driven towards the last month of the quarter? And is the new product that is witnessing growth in the 4th quarter also being driven through agency? Can give some qualitative understanding on that. And lastly, one question on your agency. When you mentioned that your agent activation rates have increased and you're witnessing productivity benefits also, could you shed some kind of qualitative understanding on the differential activation rates or the differential increase in activation rates that you witnessed between, let's say, newer agents versus higher vintage agents? And a similar qualitative data on the productivity side?
I'll take the second one first about the agency product mix, which you have asked. Let me tell you that 3rd quarter product mix for agency has been very strong for both non-PAR protection as well as for non-PAR savings. That has also continued in the nine-month ending. Non-PAR protection has seen a higher double-digit growth as well as in the non-PAR protection also, which we expect that it will continue for the 4th quarter. As far as your productivity or activity of agents are concerned, as we have already mentioned earlier in the opening remarks, productivity level of our agents have been very strong. It has gone up to INR 91,000. As far as our active productive agents, productivity also has gone up to now INR 17 lakhs. We have been investing a lot as far as our agency is concerned.
We expect that it will continue to give us not only the growth, but also the higher activity. Because agency growth comes generally from the activity increases. And that is what our fo cus. On the first part is EV, I request to Prithesh Chaubey.
So I see on the first part, when you mentioned there is a quarter-on-quarter decline in EV, I don't see there is a decline as EV has grown over the quarter. So if I look into December to September to December, there is a 3.1% absolute growth in EV. Also, as you know, we keep disclosing the sensitivity of the economic variance, economic sensitivity, both in terms of equity and interest rate. If you see the equity has fallen, and to that extent, EV movement is in line with our sensitivity. So not that.
Second, other point that you asked, we can confirm, though we are not disclosing, we are disclosing the September, and eventually, we're disclosing the year. All our operating variance is positive. There's no end. That we are always mentioning that we, as a company, we adopt the long-term sustainable assumptions. So always, there is a positive variance coming from each and every component, be it the mortality percentage or expenses.
Got it. So just one thing I would like to highlight. I think in your presentation, there is some typing error in the Indian Embedded Value. It's mentioned as INR 618.4 billion. I think the 1 and 8 have got reversed between the BSE filing and the presentation.
So yeah, I think that will update that. We'll take care of it. We can update that.
Sure. Thank you. Just one follow-up on the productivity for the active agents, which you mentioned at INR 17 lakhs. Could you do a like-to-like number for, let's say, YoY or maybe two years back so that we can compare it?
So for our agency, as I said, the productivity is increasing. And YoY, I can tell you that active agents' productivity has increased by 16%. And this is generally the phenomena for us, which is in an increasing trend for as far as our active agents' productivity is concerned. But overall, agents' productivity also is increasing. So that is also a very good sign. I think we are one of the best in the private industry as far as our agents' productivity is concerned in both the parameters.
Got it. Thank you, and all of us. Thank you.
Thank you. Next question comes from the line of Sanketh Godha with Avendus Spark.
Please go ahead. Yes. Thank you for the opportunity. Sir, my question, first question is related to individual protection business. So the individual protection business in APE terms have declined by 18% for nine months. But you said that the mix change towards what we call pure protection businesses compared to ROP led to that decline. So if I do an NOP calculation, that is number of policies calculation growth, whether we have seen the growth and this mix 63, 36, what you alluded to, now have stabled. So going ahead, we can see a growth coming back to protection business, or you believe this mix will keep on changing and the growth will remain muted probably till an optimal mix what you want to have will impact the protection business? So that's my first question.
Sanketh, as we said, the focus is on the protection, and that too within the pure protection. As already mentioned about our 3rd quarter numbers, it has seen a drastic change from the ROP to pure protection. Now it is stable around, I can say it is between 70% , 30%. We are at this moment at 63%, 37%. We are comfortable that it will be in the range of 60%, 40% in this year. As far as our ROP movement, you said 19% degrowth in the protection, but the massive growth in our pure protection, which is 53% in YoY. In the ROP, it has come down. We expect that this overall protection will continue to be good for us in the next two to three years. As already mentioned, the focus is on YONO.
YONO has already garnered 70,000-plus policies. We expect that pure protection will definitely grow. Overall protection also is on the focus for the company too in the next FY 2026 to 2027. We will stabilize around 60%-40% as the ratio for us in the ROP to non-ROP. Got it, sir. Can you just for nine months, you said 70,000 for the 3rd quarter. For nine months, the number of policies in the protection has seen a growth. If it is, then what is the content? It has seen a growth. At this moment, we don't have this. I can tell you that number in the individual protection, which is in the pure pr otection, has seen a significant growth of 53%.
Okay. Got it, sir. And the second question what I had is, sir, is that you launched a, as you told, that Smart Platina plan, which contributed INR 250 crores to December business. So just wanted to understand two points. One is that whether the momentum of this growth continues in 4th quarter, you see a product mix change in the 4th quarter towards more non-PAR compared to units. And second thing, if that happens, that impact on the margin. And second, is this product that is Smart Platina has a margin better than the overall company average? So if the mix increases, whether it will lead to a better margin profile going ahead. So that is my second question.
Lastly, the related point is that if non-Par APE growth was 7% for nine months FY 2025, then if this contribution increases, will you expect this growth to be much better for full year and then FY 2026 in that sense?
The new product, Smart Platina Supreme, the margin is better than the company margin. If this product contributes and that we are expecting that a product contribution will increase, it will help us to enhance the margin going forward. The second part is that we do expect this product will also help to change the product mix for the company as well. Both will result in the better company margin and better VNB growth as well.
Sir, you initially just made a comment to one of the questions that you expect VNB growth to be lower compared to APE growth.
Then if you have already launched a product which is better margin profile compared to company average and you expect that mix to go up, then I'm just wondering that your VNB growth to be lower than APE growth doesn't tie up with the point what you have said right now.
So let me try to re-emphasize this point. What we are saying in the longer term, growing with the high growth rate and also maintaining the similar level of margin or enhancing the margin will be slightly challenging. So over the period, if you longer-term basis, you see the margin will be that we mentioned that it will remain in the range of 26%-29% with the objective to maintain minimum 27% that we are looking for. But some quarter, depending on the growth, you may have to rationalize the margin over the period.
And then again, even if you're able to achieve the product growth, but if there is a change in the product mix, non-PAS reduction may happen, and that also has some impact. So that's the reason we are saying that there is a possibility that VNB growth might be slightly lower than the APE growth. Like we did, even example is the current financial if you look into last nine months.
Got it. But on immediate basis, you see a benefit because of the new product launch, and there could be a possibility of margin outlook to be better. That's a fair point to make on near-term basis.
Yeah, that's correct. That's correct.
Okay. And lastly, sir, your total APE growth is 11% for nine months, and individual APE growth is 14% for nine months.
So just for FY 2025, would you want to give a ballpark number what you will grow at? You give that number for FY 2026 or little medium term to be 15%-17%. But for immediate 4th quarter, included what kind of a growth we can expect for 2025 on total APE and individual APE separately?
So we will maintain the same rate of growth what we have done nine months for this financial year. So as we have already mentioned previously, Sanketh, the individual APE will be in this range of 14%, and then total APE will be in this range of around 10%-11%. So strategically, if you have seen that why the overall APE has come down is because of the group fund management business. And where already has MD in the opening remarks said, so the market where we want to be in a profitable business.
So that is the reason we are concentrating on individual APE this financial year around 14%-15%, and this total APE of around 10%-11%.
Got it, sir. Perfect. Thanks. That's my questions. Thank you.
Thank you. Next question comes from the line of Rishi Jhunjhunwala with IIFL Institutional Equities. Please go ahead.
Yeah. Thank you for the opportunity. Just a couple of questions. Firstly, on the margin side, I just wanted to understand you've been able to maintain margin sequentially, whereas the product mix has gotten tilted even more towards units in this quarter. So what were the tailwinds that helped you in this quarter? And also, you mentioned 27%-29% in the long term. Then outside of a change in product mix where, say, ULIP comes down and traditional goes up and protection goes up in the future, are there any other levers that you can call out?
On the first part, despite ULIP margin going up, as I mentioned, there are multiple reasons for that. First reason that we explained a few minutes back that in Q1, we are not able to take part on the impact of the yield fall on things. And that part, we have all the non-PAR part, we have repriced in the Q2, and that's reflected fully in the Q3. That's the reason the non-PAR margin has gone up as compared to Q1. So that's compensated to some extent the adverse impact on the margin on account of increasing unit-linked business.
Also, we mentioned that we launched several protection products, and we also mentioned that pure protection has better margins, so that's also helping us. Another aspect is that we have launched the protection rider and attached our savings product. And the attachment rate is also quite encouraging. That's also helping us to enhance the margin of that. So despite the product non-PAR not moving and stable on the similar level, we have seen this. Another aspect that we mentioned is that we get some better terms and conditions from the reinsurer, particularly for the credit life business. And that also helps us to enhance the product-level margin. And all together, if we club together, that helps to maintain the margin, even enhance the margin for this quarter if you look into the quarter sequential basis, despite the unit-linked mix increase.
And we are also working, and we're going to launch the protection rider on the unit-linked business, and we hope that this also helps us. Other point is, other than product mix, there will always be the lever, and that we keep saying that as a company, we try to optimize the value both for the company as for the policyholder. And in that respect, we are evaluating and exploring each and every customer segment and try to design the product for that particular segment, optimize value. And that optimization and segmentation is helping us to enhance the margin. And that is another lever available with us going forward that may improve and enhance our margin going forward.
Okay, sir. And just a second question on Banca. And I know in different ways it has been asked during the call, but just want to get some color on in terms of slightly medium-term growth from our parent bank. For us to grow double-digit in that channel, how much of it is dependent on the penetration levels being lower and the bank willing to push that versus some of the base effect that is already there and probably a caution around the products being sold? So what I'm trying to understand is how do we get comfort that that channel, even in future, with the kind of base we have, will continue to grow double-digit if at all?
See, for channel in the bank, particularly, we are considering, as initially said, not only for SBI particularly, but other bank partners also.
We have currently five bank partners, and we also have tied up with India Post Payments Bank. All across, we are seeing how to penetrate or increase our penetration across the partnerships. As far as the current quarter is concerned, we have seen with a big base. Last year, if you remember, the industry grew by 8% and we grew by 18%. With such a large base of the 3rd quarter, that is the biggest quarter for us, we have seen a growth in the bank also. We believe that there are a lot of levers available for us, the penetration, particularly because we have seen till date, the hard rate is 2.5%-3% penetration in the overall market in the banking side, where our partners are.
We will capitalize all our relationships with various models, which we have already been very successful. We expect that the penetration will increase and the growth will come back. Whatever we have seen during this financial year, I think it will settle down, as we have already mentioned. There are various news which we don't see that any point of reaction. Going forward, it will definitely help us for improvement in our growth rate for these bank partners along with SBI.
Okay, sir. Thank you. All the best.
Thank you. Next question comes from the line of Raghav with JM Financial. Please go ahead. Mr. Raghav, please go ahead with your question.
Yeah. Thanks and congratulations on a strong set of numbers. Sir, just a couple of questions. First, on the protection piece, I mean, just doing some math around INR 100 crore would have come directly from the new protection plan that you're selling to. So is there a conscious decision to stop selling ROP products? And is it because there has been a poor mortality experience in that segment? My understanding is ROP is typically sold to a less affluent segment. So have we seen some negative mortality experience on that?
So it is purely a customer's choice. And in this particular product on the banc channel, we have seen a welcome kind of change that customers are going i n for pure protection product. There is no conscious decision. We are offering both the options to the customer, but this is a welcome change that customers are opting for pure protection product.
But you do know that under the new guidelines, we have stopped one small ticket ROP, which we wish to sell early. So to that extent, there will be some reduction in ROP in the future.
Okay, sir. Thanks for this. And secondly, sir, with a very strong under-penetration of insurance, the 10% growth target from bank, I mean, is it not very low?
So you see, there is a lot of under-penetration and under-insurance both in Indian market. And the same kind of demography is in the State Bank customer group also because the State Bank has now 53 crore plus customer. Almost every third Indian is having an account with the State Bank. So we are very sure that the growth in the bank channel will be in line with the industry growth at least. And that is why we are projecting these kind of numbers.
You would have gone through this Swiss Re report also. Their expectation for the Indian industry to grow is around 7%, 7.3% for the next five years. So projecting a 10% growth, I think that is a fair enough number. But we are all set to explore and exploit all kinds of opportunities available in the market.
Thank you, sir. Thanks for your answers.
Thank you. Next question comes from the line of Neeraj Toshniwal with UBS Securities. Please go ahead.
Yeah. Hi. So just one question on credit life. I've missed the number. How's the growth in this quarter and why?
In APE terms? So credit life this quarter has grown 16% over last year.
And quarter- and- quarter?
Quarter- and- quarter only, I'm saying. Q3 FY 2025 compared to Q3 FY 2024. That is 16%.
Versus Q2?
Q2 versus Q3.
Sequential growth is also there quite strong.
Q2 was a little mut ed on the credit life side. So Q3 numbers are much better than that.
So it should be 20% growth over Q2, according to me. I'll have not.
What is the absolute number you can share this quarter? Absolute credit life EP?
I'll give you a growth. 17% growth should be there sequentially.
And the absolute number in EP?
INR 171 crores.
Okay. Okay. Thank you so much, sir.
Thank you.
Thank you. Next question comes from the line of Gaurav Jain with ICICI Prudential Mutual Fund. Please go ahead.
Sir, congratulations on a good set of numbers. And also, sir, it's helpful to see that you have started giving EV disclosure on a quarterly basis. That is also helpful. Sir, two questions from my side. One is on reported profit after tax. We are seeing very strong growth both on a quarterly basis and on the nine-month basis. So if you can shed some light as to, is it the new normal where we can expect PAT to really grow in this manner, or is it this year's phenomenon? And if you can help us understand what exactly helps the PAT grow? Second, sir, on this new non-PAR product that we have launched and growing, and also maybe on the existing products that we have, have we set the clawback provision or the deferred commission payout structure, etc., in place? Thank you.
So coming to your first part, which is profit after tax. So this is a reflection of multiple things. One is that the major contributor of the profit is coming from the investment income. So investment income from both our traditional portfolio, which is excluding PAR.
So, non-PAR and shareholders have contributed the profit for the company. And secondly, the backbook also is very strong for us. So, renewal premium has grown by 15%. So, that is a big backbook available for us through which we are garnering good numbers as far as the total PAT is concerned. And secondly, the profit growth projection, which is currently seen, we will not give you any kind of guidance because it depends on the product mix and the kind of market movement during that period of time. So, because today we have made profit because of the lesser growth in my traditional business as compared to unit business. So, if tomorrow the product mix shifts towards more on non-PAR and PAR, so there will be a strain on the PAT.
So at this moment, we expect that it will be in the range of around 10%-15% growth for the year- on- year, as far as PAT is concerned. And then the new product, the new non-PAR, which you asked, I think I'll request Prithesh to answer.
What a question.
The commission is in line with our previous products. The commission structure has not changed. The benefit structure has changed slightly, but commission structure has not changed.
No clawback. No.
Okay, sir. Thank you, sir.
Thank you. Next question comes from the line of Madhukar Ladha with Nuvama Wealth Management Limited. Please go ahead.
Hi. Congratulations on a good set of numbers. Just a couple of questions. See, the medium-term growth you're still guiding for is 15%-17%. Now, bank channel, as I understood, is not expected to grow that fast.
So it will probably grow at the, whatever, 8%-11% sort of a range. And it's contributing almost about 65% to individual EP. That basically means that the other channels have to grow at almost probably 25% sort of a number. Now, my question is that what is our right to win? How will we be able to recruit that productive and agency channel? And we are also not that competitive when it comes to commission payouts. So would that mean that in order to grow at this rate, we would have to aggressively also increase our commission payouts? And that would then also result probably in an impact on the margins coming from this channel. So some sort of clarification and what confidence do you have that you will be able to grow that other channel at that faster rate and the margins from that channel?
So that would be my question. Yeah. If you can give me some color on this.
So let me just tell you that agency channel for SBI Life has been a consistent growth story for many years now, so more than 10-15 years. And the pressure to pay commissions or whatever you were mentioning has always been there. It's not a new phenomenon. Our advantage is that our dependence on few agents is very limited. We have a very wide base of agents and activation rates which are quite good compared to some of the other players. And that helps us widen the agency distribution. We think this strategy we will continue, and it's a sustainable strategy by which we will be able to grow the agency channel without having to really compete on commission. Commission competition happens largely for very large agents and not for mass of agents. And a large part of our business comes from mass of agents. And there is e nough and more scope in India to recruit more agents and growth.
And we are helped in this particular aspect by having a very strong brand where people have a lot of trust. So despite whatever shortcomings you talked about of the agency channel, we have the largest agency channel in private sector, and it is second only to LIC in India. Despite all these shortcomings, we have been able to create that kind of sales force in the market. And with the kind of policies we have for our agents, we are pretty sure that we will continue to grow in an even better manner in coming times with the kind of opportunities that we have across India.
Okay. Just to follow up also on protection, you mentioned that 63% is now pure protection. Sorry, is ROP and 37% is pure protection. I just wanted a clarification. This is on value basis, right? On premium basis, right? Or is it on number of policies?
Madhukar, the overall nine-month ending, the ROP to non-ROP has moved from 90%-10% to now 80%-20%. And we said for the quarter three, the ratio has changed to now 63%-37%.
And this is on premium basis?
Premium basis. This is on premium basis. Yeah. Understood. Got it. Got it. All the best. Thank you. Thank you.
Thank you. The last question comes from the line of Supratim Datta with Ambit. Please go ahead.
Thanks for the opportunity again. I have just one follow-up.
So if you could give us some clarity around how does the cost structure in bank versus agency differ, and hence, given we are now going to grow faster in agency, we have been growing faster, but that proportion is going to go up. Then how does that impact the VNB margin? Because I just wanted to understand if one unit or one non-PAR is sold in bank versus in the agency, how does the margin or cost structure differ there? If you could help me understand that, that would be very helpful.
See, the major component, the between the Banca and agency is the fixed cost in agency as compared to Banca. As far as the commission structures are concerned, it is almost similar.
For us, as already said, the agency is a consistent investment for us, and which we have been doing it for the last two decades. We will continue to do that. The cost efficiency which is coming from agency is through product mix and the persistency. That is very well reflected in our all parameters as far as the margins or the VNB is concerned. We don't expect any challenge per se for our agency margin to go further down as compared to Banca because Banca is definitely profitable for us as compared to agency. But yes, at the same time, the product mix also plays a bigger role. We expect the product mix, the way it is now stepping up in agency, will definitely give us the better margin going forward.
Could you quantify how much is the data between bank and agency VNB margin?
Generally, that depends on various parameters. So we don't disclose on those aspects.
No problem. Thank you.
Thank you.
Thank you.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question and answer session. I would now like to hand the conference over to Amit Jhingran for closing comments.
Thank you, everyone, for the time and all the queries. I hope that all the queries were responded to by our team and me in a satisfactory manner. But just in case you have anything else, you can get in touch with our investor relations team with any follow-up question. Thank you once again. God bless.
Thank you. On behalf of SBI Life Insurance Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.