Ladies and gentlemen, good day and welcome to the SBI Life Insurance Company Q1 FY26 earnings conference call. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Amit Jhingran, Managing Director and CEO, for opening remarks. Thank you, and over to you, sir.
Good afternoon, everyone. It is a pleasure to welcome you all to the results update call of SBI Life Insurance for the quarter ended June 30th, 2025. We appreciate and thank you wholeheartedly for your valuable time and effort involved in analyzing the results and joining 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, Mr. Sangramjit Sarangi, President and CFO; Mr. Abhijit Gulanikar, President and Business Strategy; Mr. Subhendu Bal, Chief Actuary and Chief Risk Officer; Mr. Prithesh Chaubey, Appointed Actuary; and Smita Verma, Senior Vice President, Finance and Investor Relations, are present here. As we celebrate 25 remarkable years of SBI Life, we take immense pride in reflecting on our journey to becoming one of India's foremost life insurance providers.
The journey has been characterized by resilience, innovation, and an unwavering commitment to serving the financial protection needs of millions of our fellow citizens. This milestone is a testament to our unwavering commitment to excellence, innovation, and, most importantly, the trust that millions of customers have placed in us. The 1st quarter of FY 2026 has set an optimistic foundation for the year ahead, successfully achieving the desired targets on various key business parameters that we have set for ourselves, all thanks to the collective efforts of our dedicated team. Our employees' productivity and commitment have been outstanding, driving enhanced operational efficiencies and customer centricity across all touchpoints. The performance of this quarter reflects our focus not just on driving business but on a complete ecosystem like mix, persistency, and operational indicators.
This can be witnessed through our 13th and 61st month persistency ratios, underscoring the strengthening of our customer relationships and the overall quality of our business. Additionally, we have observed a traction in our individual new business premium towards the end of the quarter, alongside a favorable shift in our product mix towards guaranteed non-par savings and protection solutions, reflecting evolving customer preferences and our strategic focus to shift towards a balanced product portfolio. Though we still strive to maintain this shift in our mix, our endeavor is to achieve the company's growth aspirations. Despite operating on a high base from the corresponding quarter last year, our ability to maintain growth above the industry in individual rated new business reaffirms the resilience of our strategy and the deep trust our customers place in us. Our agency and bancassurance channels continue to be the pillars of our distribution strength.
Notably, in this quarter, other distribution partners like broker, other bank partners, and websales have also contributed meaningfully. The integration of these channels with our broader ecosystem has significantly enhanced our market penetration and expanded our reach, allowing more customers to benefit from our comprehensive insurance solutions. Another standout feature of this quarter has been the significant focus on protection plans, which have gained impressive traction. Notably, the protection segment witnessed growth of 53% on an APE basis and contributed 11.7% of total APE. As the insurance landscape evolved, the need for enhanced protection solutions became increasingly critical. SBI Life is committed to innovating and expanding its product portfolio to address the growing financial security needs of our customers. As we move forward, our continued emphasis on customer trust and product portfolio will be key drivers in sustaining our growth momentum and creating long-term value for all stakeholders.
Now, let me give some key highlights for the quarter ended 30 June 2025. New business premium stands at INR 72.7 billion, with a private market share of 21.3%. Individual rated new business premium stands at INR 34.7 billion, with a growth of 8%, and private market share of 22.3%. Gross rated premium stands at INR 178.14 billion, with a growth of 14%. Profit after tax grew by 14% to INR 5.94 billion as compared to the corresponding quarter last year. Value of New B usiness stands at INR 10.9 billion, with a growth of 12%. VoNB margin stands at 27.4% for the quarter ended June 30th 2025, a gain of 62 basis points. Indian Embedded Value for the company, as of June 30th 2025, stands at INR 742.6 billion.
Our AUM, the Assets Under Management, stands at INR 4.76 trillion, with a growth of 15% over the corresponding quarter last year. Solvency ratio of 1.96, as against the regulatory requirement of 1.50 as of 30th June. We will now update you on each of the key parameters in detail. Let me start with the premium. On individual rated new business, we stand at INR 34.7 billion, with a growth of 8% over the corresponding quarter last year, and maintain our leadership position with a private market share of 22.3% and total market share of 15.4%. The company's three-year CAGR of individual rated new business premium stands at 10%, outpacing industry CAGR of 9%. Group new business premium stands at INR 23.3 billion, with a contribution of 32% in new business premium. We have collected total new business premium of INR 72.7 billion.
The company's private market share stands at 21.3%, and total market share stands at 7.8%. The company's three-year CAGR of new business premium stands at 9%, outpacing the industry CAGR of 8%. Renewal premium grew by 24% to INR 105.5 billion, which accounts for 59.2% of the gross rated premium. To sum up, the gross rated premium stands at INR 178.14 billion, with a growth of 14% over the corresponding previous quarter. In terms of APE, premium stands at INR 39.7 billion, registering a growth of 9%. Out of this, individual APE stands at INR 35.08 billion, with a growth of 6%. During the quarter ended 30 June 2025, a total of 407,000 new policies were issued. The number of life covers during this quarter ended 30 June 2025 is 4.4 million.
The growth in sum assured serves as a positive indicator of consumer confidence and the increasing awareness of the importance of financial protection. Individual and group new business sum assured registered a growth of 73% and 117%, respectively, compared to the corresponding quarter last year. Let me give you details about the product mix. As of June 25, 2025, our guaranteed non-savings products are contributing 19% on an individual APE basis. Amid aggressive pricing trends across the industry, the company has remained disciplined, aligning its non-par savings product pricing with the market yield and has still achieved steady and sustainable growth in this segment. Individual unit new business is at INR 27.4 billion, and it constitutes 55% of the individual new business. Individual protection new business is at INR 1.7 billion. Individual protection business for Q1 FY26 has grown by 10% on an NBP basis as compared to Q1 FY25.
Traction in participating products continues and witnesses a growth of 28%. During the quarter, the company witnessed growth in all its retail products, and the flagship child plans, that is, Smart Future Star and Smart Platina Young Achiever, which were launched in the previous quarter, sold more than 24,000 policies and collected more than INR 1.85 crores of premium from these two products. Group protection new business stands at INR 8.1 billion, with a strong growth of 43%. Credit life new business has grown by 25% and stands at INR 5.9 billion. Protection business contributes 12% of APE and stands at INR 4.6 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 15.5 billion. Moving to updates on our distribution partners.
With the strength of more than 59,000 CIFs, the bancassurance business of S B I and RR B contributes 58% to the total APE basis. On an individual APE basis, it stands at INR 22.4 billion, reflecting a growth of 8%. S BI branch productivity on individual APE stands at INR 3.8 million for the quarter, registering a growth of 7%. Additionally, due to the recent merging of RR Bs under the One State One RRB, the total Regional Rural Banks have reduced from 14 to 9, resulting in lower contributions from these banks than last year. The agency individual rated premium stands at INR 10.88 billion in quarter one of FY 2026. Our agent productivity for the quarter stands at INR 2.15 lakhs on individual NBP terms.
The agency channel has witnessed a shift in product mix, increasing its contribution from non-par segments by 722 basis points, and the share of ULIP stands at 59% versus 68% in the corresponding period last year. It is supported by a robust growth of 78% in agency individual sum assured during Q1 of FY 2026. The company added more than 31,000 agents on a gross basis during the quarter. We have opened 36 new branches this year. This 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.
As mentioned in opening remarks, during the quarter, other channels, that is, direct corporate agents, brokers, online, and web aggregators, grew by 16% in terms of individual new business premium and contributed 14% of total APE. Linked business through the other channels registered a growth of 7% on an APE basis. We are investing in building our online business channel. Individual rated premium through this channel has grown by 46% in the current quarter compared to the corresponding quarter of last year, and protection business through this channel on IRP terms grew by 58% as compared to the previous quarter. Some updates on profitability: the company's profit after tax for the quarter ended June 30, 2025, stands at INR 5.94 billion, with a robust growth of 14% as compared to the corresponding quarter last year. Our solvency remained strong at 1.96, as against the regulatory requirement of 1.50.
Value of New Business stands at INR 10.9 billion, with a growth of 11.7%, and VoNB margin stands at 27.4% for the quarter ended June 30th, 2025, as compared to 26.8% in Q1 of FY 2025. The shift in VoNB is mainly on account of the shift in product mix as compared to the corresponding quarter last year. Embedded value for the company as of June 30th, 2025, stands at INR 742.6 billion. Talking of operational efficiency, the OPEX ratio stands at 6.3%, and the total cost ratio stands at 10.8% for the quarter ended June 30, 2025, as compared to 6.1% and 10.5%, respectively, for the quarter ended June 30th, 2024. With respect to the persistency of individual regular premium, the 13th Month Persistency stands at 87.12%, an improvement of 58 basis points, and the 61st Month Persistency stands at 62.80%, an improvement of 501 basis points.
As mentioned in my opening remarks, Assets Under Management stands at INR 4.76 trillion as of June 30th, 2025, having a growth of 15%. Death claim settlement ratio stands at 96.44% for the quarter ended June 30th, 2025. Our mis-selling ratio stands at 0.02%, 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 our digital transformation, we remain committed to innovation and excellence, ensuring that we stay ahead of an increasingly competitive landscape. The company continues efficient usage of technology for the simplification of processes, with 99% of the individual proposals being submitted digitally. 62% of 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 our agency channel along with the partner bank networks, we are confidently positioned for the future. Our commitment to provide exceptional customer service strengthens client relationships and reinforces our status as a trusted leader in the market. In order to maintain our leadership position, our strategy moving forward will center on three main areas: innovation, customer centricity, and sustainability. We will achieve this by enhancing digital capabilities, expanding reach, strengthening distribution networks, and product development. With a focus on long-term sustainable and profitable growth, we aim to create lasting value 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. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and 2. Participants are requested to use their 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 from Emkay Global. Please go ahead.
Good evening. Thanks for the opportunity. It's a great set of performance. A couple of questions. The first one is, on the margin front, it's a commendable performance.
My question is that, I mean, given that now you sort of have been focusing to move more or grow more outside the bank as well, and that's where, I mean, agency expansion and also expansion of branches perhaps in plan. Is, I mean, this OpEx, it jumps in this margin calculation. Keeping that in mind, I mean, whatever your branch expansion and agency addition kind of plans you have. If you were to kind of accelerate those branch openings this year, will that have some kind of any changes in your operating expense exemption or the current margin calculation keeping sort of that part of exemption? The second piece, again, related to agency only, agency has been kind of a focus area. I mean, you have a strong track record of your agency being productive. If we look at this point in time, the growth in agency looks weak.
Is there something, I mean, not clicking or easy to unexpected lines at all? By when can we expect a turnaround or other acceleration in agency growth? Thank you.
If you look at the industry growth figure for the agency, the growth was only at around 1%, and we grew substantially higher at 6% plus for the agency channel. Now, the 6% plus comes on top of a very robust first quarter of last financial year when our agency grew by 43%. This growth, although a little lower than what we expected, is in line because this is broadly in line with our plans for the year. As you talked about. Increasing more number of branches, this quarter we added. 31,000 plus agents on gross basis.
So now these branches which we opened last year and this year also we are opening, along with these new additional agents, we are sure that going forward we will be getting the agency numbers also as we have planned for the current quarter. Talking of effect on the margins because of the branch opening, last year also this agency, you are aware that Agency 2.0 we started from the first quarter of last financial year itself. Last year also we opened the similar number of branches, but the productivity improvement and the additional business and additional profits from these branches taking care of any additional costs. Last year also there was no effect on our OPEX margin aspect, and we continue to project the same this year also.
Okay. Thank you.
Thank you. We take the next question from the line of Nischint Chawathe from Kotak. Please go ahead.
Yeah. Hi, Nishkhun here. Just a couple of questions. One was, again, if you could just remind us about your growth kind of target for the year. I believe you had, in the past, mentioned that you'd look at the agency to grow in kind of mid-teen levels. And is that kind of any change over there? And any specific cohort or segment of agency that has seen slow down?
We continue to be bullish on agency, and our plans are in place. We are going as per our plans. The number in this quarter definitely was a little lower than what we expected, but the kind of product mix that we achieved in the agency channel during the quarter is in line with the product mix that we are expecting for the company as a whole, in fact, better than that. That is taking care of slightly lower growth.
Going forward, we are sure that our numbers will also come back along with the product mix that we are getting in this quarter.
Sure. The other one is on, if I look at the margin expansion this quarter, which product has actually contributed to highest to the expansion? Because if I look at your, if I understand rightly, your margins in ULIP have actually been higher than margins in the PAR business. I was just curious, what are the expansion drivers this quarter?
The margin expansion happened on two accounts. One part is that if you see the shift in the product mix, So manpower has gone up, protection has gone up. That happened. Subsequently, we just mentioned that when we launched the protection product, actively repricing the NAMPA, that also contributed. Third aspect is that we have launched the RIDER, and RIDER attachment rate is almost 40% initial rate.
That also contributed. I will say that not any specific product, but obtaining an optimal product mix has helped us towards this margin expansion.
Just one last question is on the IEV that you have reported. Is there a large capital gain during the quarter? Because if I just try to work the number backwards, it appears to be that either there is a release or a large capital gain.
Nothing specific. Only, you see that there is a market movement happened on account of the equity had done better and it has gone down. So we get to MTM gain on that side. That affects in the IEV. Also, you know that if you look into our ROEV, it is quite healthy. Unwinding plus positive earning during the quarter, that also contributed to the IEV growth.
There is no major variance, I would believe.
No, no major variance.
Got it. Thank you very much and all the best.
Thank you.
Thank you. The next question comes from the line of Aditi Joshi from JP Morgan. Please go ahead.
Yep. Thanks for the opportunity. Just a couple of questions on the product mix within the channel. There is quite a varying growth in the particular products. For example, non-PAR in the banker was weak, whereas it was strong in the agency. Similarly, there was some differential within the ULIP sales as well, which was strong in the banker but weaker on the agency. If you can just help us understand what is causing this variance or differential in the mix across the products, it will be helpful. Second question is on the, there has been some news on the new chairman appointment by the regulator.
If you can just comment on what policy expectations you will have from the new chairman and what is the outlook or your view on those, that will be helpful. Thank you.
Product mix, we have a broad guideline for the company for the year, and that has been also in place for the last financial year that we want to move to a healthier product mix. By healthier, I mean which provides a good set of margin numbers also for the company. We have been able to move the needle on the agency part as per the company's guidelines. There has also been a movement in the product mix on the banker side. Though it has not happened in the first quarter as we wanted to, there is a positive shift.
There is a 2% reduction in units in
the banker channel also, and we want to bring it further down by improving our non-PAR and protection business in banker further. I am sure that in the remaining three quarters, we will be able to align the banker product mix also as per our expectation and as per our guidance set for the year. As far as the new chairman is concerned, I welcome him on my personal behalf and on the behalf of the company. In his new role, and we look forward to work with him constructively for betterment of the industry and all stakeholders in the industry.
Just a follow-up question. On the agency side, you think the mix that we had posted in the first quarter could likely be continued in the coming quarters as well?
Yeah. Definitely. We are working on that line only.
I mean, our guidance and our monitoring of our field forces, our frontline managers. Everybody is aligned, and we are sure that we will be able to maintain this product mix broadly with some kind of seasonal variations.
Okay. Got it. Thank you.
Thank you. The next question comes from the line of Nidhesh Jain from Investec. Please go ahead.
Thanks for the opportunity. Sir, first question is on protection growth. If you look at the monthly disclosure, our individual sum assured growth was upwards of 70%, but retail protection grew 7% by Y-o-Y in APE terms. So what explains this difference?
So the pure protection business has increased. The share of pure protection has increased compared to pure. That is the only reason why sum assured has increased faster than premium.
So retail protection growth is 70% by Y-o-Y or retail protection APE growth?
No, APE growth is only 7%, but the growth has come because in TROP, the premiums are higher for same sum assured, right? Pure protection does not create. So the premium growth will not be seen when the product mix shifts towards pure protection compared to TROP. And that was happened from 90%-10%. We are 70%-20%, 75%-25% now.
75 is pure protection now or?
No, TROP. TROP.
TROP. Okay. Okay. Okay. Second, sir, for a back-to-back basis, is it right to understand that banker margins will be better than agency margins for the same product like ULIP and same product non-PAR selling through banker versus agency?
See, generally, we do not bifurcate between our channel-wise the margins are concerned. So for us, both the channels are giving us good margins as far as the segments are concerned.
I was trying to understand if there is a distribution mix change towards agency, whether that will have a negative impact on margins or it is neutral or positive benefit of margins.
See, as far as our mix is concerned, you have seen that since last year, the agency has been dominating, and agency has done, as compared to banker, very strongly last year. But the margin also has picked up because of the product mix and the cost structure which we derive or the drive in the market. At the same similar lines, in this year also, we do not anticipate any kind of deviation from our guidance as per the margin expense.
Sure. Sure. And the third question is on group protection. In that product category, we have seen very strong growth.
If you can give the split of group AP in terms of group term and credit life, which segment has shown growth in this quarter?
Both the segments have shown growth. Credit life as well as GTI. Credit life has grown by 25%, and the GTI also has grown in the double digit, very significant double digit growth. Both have shown growth.
Credit life growth will continue. The group business GTI is lumpy. There you may not see such high growth in future. You may or may not see because it is lumpy. You cannot really.
Sure. Sure. What is the quantum of group term GTI in this quarter? AP in terms of AP?
We do not have the specific number per se, but both together is giving us almost kind of 60% of our total protection number.
Okay. Okay. The last question is on economic assumption change in VNB book. What is driving that?
It is just impact of the helical movement. There is nothing else.
Okay. Okay. Sure, sir.
That is it from my side. Thank you.
Thank you. Thank you.
Thank you. The next question comes from the line of Swarnabha Mukherjee from B&K Security. Please go ahead.
Hi, sir. Thank you for the opportunity and congrats on a strong margin. I just first wanted to understand from the growth point of view, if you could help us understand that in terms of the individual business. I mean, in the month of June, we saw a sharp improvement in growth. Which channels and products were contributing for the same?
I am just wondering that if it is led by, say, for example, retail protection because ticket sizes are lower there, would that be so needle moving in terms of growth? If you could give us a broad sense how June growth was or maybe also some comments on July, from which channels and what product mix is driving the same. Given that, keeping the June growth in perspective, could we expect any upward revision to the guidance in terms of growth for the year which you had previously given? That is the first question, sir. Second is, I am estimating that our Group Term Life growth is even much stronger than the credit life growth. Just wanted to understand about the pricing environment in Group Term Life, has it improved significantly compared to what it was maybe a few months back? If you could comment on the same.
Thirdly, sir, in terms of the 49-month persistency, if you could highlight what kind of impact is that number?
Yes, sir. These will be my questions.
If you look at the kind of growth curve that we are having and you are asking regarding the products that have contributed. Our guidance in the last two, three quarters has been that we are moving towards a healthier product mix. Our product launches also in the last six to seven months have been in the non-PAR segment and protection segment where we have launched a few very strong products. Thanks to our field forces and the features of the product, we are getting very good response in these non-PAR and protection segment products.
The June growth, of course, there was a green shoot visible in the banker channel also, and that contributed positively during the month of June, adding to our quarter numbers. We expect that going forward, this trend will continue, and we stick to our guidance of growth for the year in the mid-teens, which will definitely be at par or above the industry level, private industry level specifically. Your second question was about the persistency in these 49 months. This is something which, if you are tracking the numbers for the last two, three years, you would have seen that this cohort is moving from 13th to 25th and 37th. Now it has reached 49 months. This is a cohort which is creating problems in the persistency for that particular period.
By the end of the year, I think this cohort will move to the 61st month, and then it will go out of the tracking. This is a cohort where, despite our best efforts, we have not been able to recover and get those customers on board again.
Okay. Understood, sir. I have also asked for the group term life side, if you could highlight on the pricing as well.
See, the pricing scenario for the group term business is continuing to remain very competitive in the market as always. There is no change as far as industry or pricing competitiveness is concerned. As you keep mentioning, at our company, we look into the scheme by scheme, and when we get a reasonable, profitable scheme, we try to take on the right research.
In this process, we are also taking certain support from the green shore premium green shore as well as the class board of green shores, and that is also helping us. This is a lumpy business that we keep mentioning. This quarter, we get very good retail schemes, and we get on all profitable term conditions. That will take care of that, and that is the reason growth happened. Difficult to comment what will happen in Q2 and Q3. If we continue to get the good scheme, we will be more than happy to underwrite and take our group because we do not have any challenge in the capital prospecting. We keep mentioning that we are not going to get the GTI on account of the adverse impact on the margins. We will continue to only have the margins for GTI.
Understood, sir.
Just a quick follow-up on the June numbers that you highlighted that banker has seen as well. Just wanted to understand that is there any, I mean, in banker, is ULIP picking up, or is there a possibility that ULIP might come back slightly higher in the mix going forward, or do we strictly control it at this current level?
As you would have noticed in response to somebody's previous question, I told that during the quarter, even the banker product mix improved by 2%. I mean, the ULIP sales contribution was 2% lesser than the previous year. We are expecting that the product mix in banker will also move as per our expected line during the year.
Okay, sir. Understood. Very clear. Thank you so much, sir, on that one.
Thank you. The next question comes from the line of Dipanjan Ghosh from Citig roup. Please go ahead. Hi.
Good evening, sir. Just a few questions from my side. First, in terms of the agency, despite a shift in business mix towards more of PAR and non-PAR, the agency activation rates are up Y-o-Y . Just wanted to get some sense in case the market environment improves and let's say the ULIP kind of picks up, what sort of agent activity rates improvement are you really factoring in in your overall growth estimate for the year? Second, in terms of your overall commentary, at the start of the call, I already mentioned that there were green shoots towards the end of the quarter in your guaranteed retail products. In terms of the overall business also, I mean, are you seeing similar trends playing out, let's say, even in July? How is the fee terms street really kind of giving their response to it?
Last question is on the entire journey of ULIP margins. Across the industry, we have seen pickup in the ULIP margin profile. In terms of your positioning out there, how much more scope do you see in terms of improving the margin profile across each of the product segments, and more specifically ULIP?
See, first one, as we related to the agency, I think the product shift is as per the plan. We have seen that last year vis-à-vis this year, it has been a positive shift. As already said, this overall productivity enhancement might also improve further in these next nine months because the kind of targets we are aspiring for us in the agency channel which will definitely be achieved through the productivity enhancement. We are quite optimistic that the agency productivity will improve in the going forward.
As far as the third one, you asked about the ULIP margin expansion. I think we are, based on our trend of margins in the ULIP, which has always been better because of the cost structure which we are driving in the SBI Life, so which will continue to deliver us the good margins going forward. Which was the next one? The second one which you asked about. Non-PAR guaranteed products. Non-PAR guaranteed products. Yes, you want to ask?
No, I think, sir, as you mentioned that we launched this new guaranteed product, particularly for the side segment and income things, we continue to see this demand in the market, particularly where interest is going down, and we are able to actively reprice to ensure that we give the optimal return to the customer. We do see the interest of the policyholder or prospective customer will continue to be there.
And we are able to drive this mix. Non-PAR to obtain our product mix that we are looking for.
Sorry. Just on the second question, just a follow-up that my question was more in terms of the commentary that towards the second half of June, probably things picked up. You mentioned on the banker side, things were looking good. You mentioned that guaranteed return is looking good. I just wanted to understand, is that trend continuing going into July, or it was more of like a June-end phenomena which probably kind of did not spill over to the 2nd quarter?
I think June is one quarter where there is no quarter-end phenomena kind of thing. This is a result of our efforts that we have been consistently making to improve the product mix, to improve the sales in various channels and all.
Got it.
Thank you, sir, on all of it.
Thank you.
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two questions per participant. We take the next question from the line of Shreya Shivani from CLSA. Please go ahead.
Yeah. Thank you for the opportunity. I just have one question. It's on the growth guidance for the year. At the end of fourth quarter last year, we had mentioned that individual APE growth of about 13-14% driven by 25% growth from agency channel, 10% from banker channel.
Now, unlike the past six months, when the commentary in the media about the PSU bank sales of insurance was very negative, in the last one month, there have been a few media articles which suggested that government is telling the PSU bank to focus on selling insurance products along with core banking operations as well. With that in the background, would we be revising our guidance upward? Is there any different outlook you're getting from your banker partner? Any commentary on that? And whether the growth guidance, you're still sticking to the same growth guidance, or you're looking at a different number, that would be useful, particularly for the banker channel.
This term has been consistently being asked for the last one year almost. You yourself have said that the earlier reports were in media, and the new reports are also in media.
We have consistently been saying that from the regulator side, there has been no indication, no formal indication for anything like that. And that is why the growth. Was on a continuous basis. There was no point of time where we faced any negative kind of growth because of such news articles or media murmur. We will say that there will not be any effect on the guidance that we provided, and we stick to the kind of guidance of mid-teens growth on an overall basis in the current financial year.
Okay. That is very useful. Thank you, and all the best.
Thank you.
Thank you. The next question comes from the line of Prahesh Jain from Motilal Oswal Financial Services Limited. Please go ahead.
Yeah. Hi. Just a couple of questions. Firstly, again, just asking that point on the growth in the month of June.
Prior to June, the banker channel for us had been growing at a much slower rate. I think you alluded to the fact that June, the banker growth has come back in the month of June. What changed in the month of June that kind of allowed you to grow at a faster pace versus what was reported in the earlier months? Right? That was my first question. Second is on the cost trend, where we've seen some increase in cost ratio from 6.1% to 6.3%. Is it just because of the opening of new branches, and we should see this coming down going ahead, or it should remain elevated at these levels? That was my two questions.
So, as regard to the previous question also, I said that the growth was never absent.
In the current quarter also, in the banker channel, April and May both had positive growth, but June, the number was a little higher than the previous two months. This is basically mobilization of our field forces, and we got some good business in the month of June. Going forward, we expect that this seasonally affected quarter, usually first quarter is slightly slower. Going forward, we expect that we will be able to achieve the numbers that we have budgeted for and that we have guided for in the next three quarters.
Related to the cost, as you rightly said, I do not think we will have any surprises going forward because it will be definitely going to be stable around this rate of 6-6.5% because we are expanding our infrastructure not only on the branches but also on the digital assets, which will help us in the agency side.
Agency channel, which has been growing since last year, that is requiring an investment. We should continue to do that. At this moment, we do not see any big spike in the OPEX per se for the financial year 2025. Sorry.
In fact, there is a slight increase in the manpower cost because we have added around 3,000 employees in the last one year. We have opened new branches. We have increased our IT spend. All these are like infrastructure creation. As we get incremental business out of these infrastructure creation, the effect on OPEX will be further rationalized.
One follow-up. What will be your outlook for VNB margin for this year?
We continue to stick to our earlier guidance of 26-28%. You would have noticed that all along, we have been in this range, and we are sticking to our margin guidance with some positive bias.
Got it. Thank you.
Thank you. The next question comes from the line of Mohit Mangal from Centrum Broking. Please go ahead.
Yeah. Thanks for the opportunity and congratulations on a good set of VNB margin numbers. My first is that you said that the growth between the protection business was primarily from the lumpy group business. If I look at retail protection, I just wanted to understand two things. The 12% growth, I mean, how are we going to increase that? That is point number one. Point number two, the growth in the retail protection is in tier one or basically in tier two and tier three cities? If you could show some kind of a color in that, that would be helpful.
See, on the growth of the retail business, you are right. We revamped our protection product portfolio to adopt a more refined segmented approach.
Two, three months back, we launched the product with the high ticket size, INR 2 crorers above . That has also contributed. That is the reason. We are again revamping other existing term plan to make it suitable to the customer, both from the underwriting perspective as well as their demographic profile, to ensure that we get a margin enhancement as well. The objective is to optimize these things. That is also contributing. We launched that. We mentioned that for our bank platform, we launched a very simplified product where coverage has gone to INR 40 lakhs. Now we are going to enhance this further. That is quite easy to sell. That is also contributing to the growth of individual protection. To your question, is it coming for any specific city?
I will say that our protection growth is coming across all the tiers because we are focusing and offering this optimization for all segments, including tier one, tier two, tier three cities as well, and both from the bank as well as agency.
Understood. This is helpful. Lastly, in terms of the bancassurance, we have got 14,000-plus partner branches as well. I just wanted to know how much of them is activated and perhaps how many of the non-SBI banks actually contribute to the bancassurance. If you can just throw some light into that, it would be helpful.
In our numbers, we show non-SBI partners in others, not in our bankers. I mean, though they are banks, we do not deny that. The partner-to-partner contribution varies in terms of branches that are active. But typically, 10-20% branches are active on a monthly basis for our partners.
Our endeavor essentially is to drive higher branch activation with those partners. That is the key initiative that we want to take to increase that business. It will take some time. Over the next couple of years, we will hope to drive higher growth from other bank partners.
Understood. Thanks, and wish you all the best.
Thank you.
Thank you. The next question comes from the line of Supratim Datta from Ambit Capital. Please go ahead.
Thanks for the opportunity. My first question is on the agency side. You have created a highly productive agency, and the recruitment numbers have also been fairly strong. What we are seeing is the peers have also been getting more aggressive on agency, both in terms of recruitment and expansion, particularly in tier six cities.
I wanted to understand, what are you seeing from the field with respect to competition when it comes to recruitment or commissions that you have to provide? Are you seeing any changes there? If you could first color on that, that would be helpful. The second question is there have been rumors, media articles around extending the free-look period from one month to one year or slightly longer than one month. I wanted to understand, if that happens, what would be the margin impact on the product side? That would be very helpful. Thank you.
On the agency front, it was always competitive. We have faced on-ground competition for recruiting agents, always. I would say that that intensity waxes and wanes at various points in time. This is not the first time that competition has also focused on agency.
We have faced competition, and we are quite well-equipped to handle that in the coming years because we have a good structure and support system for agency, which has paid us dividends over the last many years. We think we'll be able to use that support structure and monitoring system in the future also. On the free-look and cancellation.
Sorry. I have just one follow-up on this. If you could just elaborate, what is the support structure that differentiates your agency from that of peers?
There are so many things. I mean, I cannot tell over a call what are the various support structures we have in place, what is the supervisory mechanism we have. The focus on, though we were a banker-dominant company, we never closed down any agency branch ever. There are so many other things that have come into play.
I don't think I can explain all that in a call.
One thing I will just add here is that, Supratim, the consistency on the strategy of agency growth, which is the total, the differentiator between the SBI Life and the other private insurers. We have been very consistent as far as our strategy is concerned. Even though we are a banker-dominated company, we have been very strong on agency because of our structure, strategies, and the kind of R&R and commissions which we pay. That is the reason why the stickiness of our agents is with SBI Life. Also, the biggest help is the brand, which plays a great role. Overall, if you see from that angle, in any scenario, we always scatter to 1/3 of the agency business among the private insurers.
I will add that it is not only the commission and R&R which make any agent stick to a company. It is the kind of policies that we have towards our agents, the kind of connect that we have with them, and the kind of faith they have in this brand is paying us dividends all along. This will continue in the same way.
The question from the free-look installation, we do not see any impact on the margins. There are two reasons. One reason is that when you compute the margin, we compute the policies made of free-look. That is it. Secondly, we see the free-look ratio of our company is very low, and so is the mis-selling ratio. The challenge will be for those companies where the mis-selling is much higher. You see, the longer free-look period will go into more cancellation.
That we are not expecting in our case.
That is very useful. Thank you.
Thank you. The next question comes from the line of Shobit Sharma from HDFC Securities Limited. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Sir, my question is on your rider attachment. You have mentioned that the rider attachment during the quarter was around 40-odd %. Can you help us understand how this has moved as compared to last year Q1 and last year Q4 FY 2025? What would be our aspiration to take this number to? Lastly, if you can clarify whether this rider proportion of the premium is categorized in the term segment or the respective business segment? Good. Good.
I think our objective is to offer the rider in terms of protection to meet the need of the customer.
Particularly, if it was the term segment where the payer benefit is required or extreme benefit is required, that we are offering. We are always aspiring to achieve a better attachment ratio from the current, not just to drive the profitability, but more on the need for the customer. Because the rider, there is no expense loading coming from. If the customer is buying a rider, it is a much cheaper benefit that the customer is driving. We try to do that, and we will continue to do that. We expect that our attachment ratio will be much better than what we are looking for. But again, it depends on what kind of scenario emerges at that point in time.
Last year, we did not have any big riders at this point in time. They came later half. Second half was when the riders started ruling for our products.
For ULIP, they came in last quarter. Non-ULIP, they came in late second quarter.
Okay. Okay, sir. Sir, if you can help us understand where this rider premium is classified as, is this part of the term business segment, or it belongs to the respective product category?
Respective category. Respective category, yeah.
Is it right to assume that the rider premium will contribute close to 4%-5% of the individual APE?
No. Rider premium is much lesser, so much less.
Okay. Also, sir, last question. Are you also driving rider attachment on the renewal policies, or is it only for the new business policies?
As of now, we are offering to the new policy, but our objective is to offer this rider to the existing policy customer as well because it is beneficial to the customer. We will, going forward, drive to them as well.
Okay, sir. Sir, last question.
Over the last six months, we have done multiple product interventions. If you can help us understand any particular product intervention we are about to do in this current quarter or the quarters coming forward.
We are inventing our protection portfolio on the lowest commission basis. Also, we are working to where we might be launching in this quarter the money-back plan for the PAR portfolio. The objective is to give the better money back, provide liquidity to the customer. That is the reason we are working on that side. These are two things that we are immediately looking into. Maybe we further enhance our protection offering in terms of the health segment.
Okay, sir. Thanks and all the best.
Thank you. Thank you. We take the next question from the line of Prithwesh Uppal from Elara Capital. Please go ahead.
Thanks for taking my question and congratulations on a good result. I just have one question, which is on the competition intensity that you alluded to in the non-PAR segment. I think the understanding was that post-implementation of surrender regulation, there would have been a little bit less intensity, or at least in terms of the pricing. Just wanted to get your thoughts on the same and your outlook for this particular product category for the year ahead.
See, I do not think there will be much impact will happen as far as competitiveness is concerned because of surrender value, because most people will be trying to retrice that. Intensity for the competitiveness will continue to remain the same. What will happen is how actively and dynamically you are retricing those products in the moment in the yield curve? Because you see this yield curve is not only changing.
The shape of yield curve is also changing. From SBI, we try to actively retrace those products to deflect the yield curve movement so that we are not only able to offer the return to the customer compensated to the yield curve, but also protect our margin. I think this phenomenon will be continued. I do not see because of surrender regulation coming that will impact the competitiveness of the non-PAR segment.
Understood. Thank you. Thank you. We take the next question from the line of Jeet Suchat from Asian Market Securities. Please go ahead.
Hi. Thank you for the opportunity. In the current quarter, Credit Life grew by 25%. What I am hearing from the market is that credit disbursements are lower from the few quarters in the industry. The growth is coming from the lower base, or what is the strategy that is driving the growth?
Also, what is the credit life mix in the group protection?
Credit life, we have changed some policies, including underwriting policy. 25% plus growth, we think we should be able to deliver in the current year. Bank is growing 10% plus in home loan portfolio. With better attachment rate, we should be able to deliver this 20-25% growth in the coming year. That is what we think we should be able to deliver. Largely of our overall business, credit life is 1.6% of the overall business that we are writing in the current year.
Okay. 25%. We are basically at a lower base because bank will be growing by 10%.
Bank is expected to grow 10%-15%. In home loan, we think better attachment rates, we will be able to deliver a higher growth than the bank growth rate, the home loan growth rate.
Okay. Okay. Thanks. Thank you.
Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to Mr. Amit Jhingran for his closing comments.
Thank you very much for your time and the queries. Everyone, you may get in touch with our investor relations team in case you have any follow-up questions. All the best to all of you. God bless.
Thank you, sir. On behalf of SBI Life Insurance Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.