Ladies and gentlemen, good day and welcome to the SBI Life Insurance Company Limited Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mahesh Kumar Sharma, MD and CEO, SBI Life Insurance. Thank you, over to you, sir.
Thank you very much. Good evening, everyone. We welcome you all to the results update call of SBI Life Insurance for the year ended 31 March 2023. The update on our financial results can be accessed on our website as well as on the websites of both the stock exchanges. Along with me, I have S. Veeraraghavan, Deputy CEO, Sangramjit Sarangi, President and CFO, Ravi Krishnamurthy, President Ops and IT, Abhijit Gulanikar, President Business Strategy, Subhendu Bal, Chief Actuary and Chief Risk Officer, Prithesh Chaubey, Appointed Actuary, and Smita Verma, Head CP Financial Investor Relations. Today's numbers are the direct outcome of the scale, quality, and strength of SBI Life business across the regions and the fundamental requirement of maintaining high quality, consistent, and sustainable business model. Let me give some key highlights for the financial year 2023.
New business premium registered a growth of 16% over the previous year and stands at INR 295.9 billion, leading to private market leadership. Individual new business premium stands at INR 209.1 billion, with a strong growth of 27% and private market share of 24.3%. Gross written premium stands at INR 673.2 billion with a growth of 15%. Production new business premium grew by 19% to INR 36.4 billion. Profit after tax stands at INR 17.2 billion, with 14% growth over last year. Value of new business is INR 50.7 billion, registering a strong growth of 37% over the INR 37 billion in March 2022.
VONB margin is at 30.1%, with an improvement of 420 dips over 25.9% in March 2022. Embedded value stands at INR 460.4 billion, registering a growth of 16% over the INR 396.3 billion in March 2022. Embedded value operating earnings stands at INR 90.5 billion. Operating return on embedded value stands at 22.8%. Assets under management grew by 15% to INR 3.07 trillion. Robust solvency ratio of 2.15 against the regulatory requirement of 1.5. I will now update you on each of these elements in detail. Let me start with the premium. Individual new business premium has grown to INR 209.1 billion, with Y-O-Y growth of 27%.
Single premium contribution is 30% of individual new business premium, which is mainly attributed to growth in our individual annuity product. The company gained private market share by 92 basis points to 24.3%. On individual rated new business premium stand at INR 152.2 billion with a growth of 18% over the previous year, while maintaining our leadership position with private market share of 22.3%. Group new business premiums stand at INR 86.8 billion, with a share of 29% in new business premium. We have collected total new business premium of INR 295.9 billion, registering private market share of 21.3%. Renewable premium grew by 13% to INR 377.3 billion, which accounts for 56% of the gross written premium.
To sum up, gross written premium stands at INR 673.2 billion with a Y-O-Y growth of 15%. In terms of APE, premium stands at INR 168.1 billion, registering a growth of 18%. Out of this, individual APE stands at INR 163.8 billion with a growth of 19%. During the year ended 31 March 2023, total INR 21.98 lakh new policies were issued and registered a growth of 14% over the previous year. Since 2010, the company has maintained its leadership position in number of policies issued and consistently delivered year-on-year growth for the last 10 years. This reflects the clear goal of the company to increase the penetration and achieve holistic growth.
Individual new business sum assured registered a growth of 13% over the corresponding last year, as compared to growth of 12% at private industry level. Let me give you details about the product mix. As on 23 March , our guaranteed non-par sales products are contributing 18% of individual new business, and on individual APE basis, this comes to 24%. Non-par guaranteed product new business has registered Y-O-Y growth of 116%, mainly due to the new business contribution of Smart Platina Plus of INR 27.35 billion in the year ending 31 March 2023. Individual unit new business premium is at INR 111.4 billion, which now constitutes 53% of the individual new business premium. Individual protection new business premium is at INR 10.10 billion. Registered a Y-O-Y growth of 6%.
Group protection stands at INR 26.4 billion with a growth of 25%. Credit line new business premium has grown 23% and stands at INR 20.7 billion. On APE basis, protection contributes 11% of new business and registered growth of 16%. Annuity business is at INR 49.7 billion and contributes 17% of new business premium. Under annuity, the company is offering immediate as well as deferred government option. Individual annuity business is growing at 134% over last year, mainly due to the new business contribution of Smart Annuity Plus of INR 38.1 billion. Total annuity and pension new business underwritten by the company is at INR 84.2 billion, registering a growth of 16% over the same period last year.
Insights on the distribution partners with strength of more than 58,000 CIFs, SBI and RRB Bank Insurance business contributes a share of 67% and grew by 31% in individual new business premium. On individual APE basis, it stands at INR 104.2 billion with a growth of 19.3%. Agency, one of the strongest channels, registered new business premium growth of 19% and contributes 19% in the new business premium. Agency channel individual APE stands at INR 42.3 billion with a growth of 15%. As on March 31, 2023, the total number of agents stands at 2,08,774, a growth of 43% over the previous year. During the year, the company added a net of 62,770 agents.
During the year ended 31 March 2023, other channels, including direct corporate agents, brokers, online and web aggregators grew by 44% in terms of individual new business premium and 32% in individual APE. Production new business premium through other channel registered growth of 25%. Partnerships like Indian Bank, UCO Bank, South Indian Bank, Punjab and Sind Bank and Yes Bank registered a growth of 26% in individual new business premium. These partnerships have contributed 3% of individual new business premium. During last quarter, we signed corporate agency agreement with Karur Vysya Bank. We are confident that these partnerships will further enable us to expand the insurance market across the country. On profitability, the company's profit after tax for year ended 31 March 2023 stands at INR 17.2 billion with 14% growth Y-O-Y.
In the month of March, the company had declared and paid an interim dividend of three and a half rupees per share. Our solvency ratio remains strong at 215% as on 31 March 2023. We are happy to share that we have more than doubled the VNB in a span of three years. Value of new business is INR 50.7 billion, with growth of 37% as against INR 37 billion in the last year. VNB margin is at 30.1% for the year ended 31 March 2023, as against 25.9% in the previous year, showing an improvement of 420 basis points. Growth in VNB and VNB margin is driven by a change in product mix, predominantly in the non-par segment.
MVR value stands at INR 460.4 billion, a growth of 16% over the previous year. With our growth target on the product mix shift, we expect to maintain the healthy and sustainable VNB growth rates. Coming to operational efficiency, our OPEX ratio stands at 5.1% for the year ended 31 March 2023. Our total cost ratio stands at 9.6% for the year ended 31 March 2023. With respect to persistency of individual regular premium and limited premium paying policy, 13-month persistency stands at 85.5%. Company has registered a significant improvement in the 37-month and 61-month persistency by 236 basis points and 612 basis points respectively.
As mentioned in my opening remarks, assets under management stands at INR 3.07 trillion as on 31 March 2023, having a growth of 15% as compared to 31 March 2022. The company continued its efficient usage of technology for simplification of procedure, with 99% of individual proposals being submitted digitally. 45% of individual proposals are processed through our automated underwriting. To conclude, we continuously endeavor to maintain our leadership position and continue to further increase our market share by offering products that meet the evolving needs of our customers. With our widespread robust distribution network complicated by digital technology, our innovation strength and above all, our people power, we are placed to make the most of abundant growth opportunities offered in evolving insurance sector.
Company as well as other industry players are in line with the regulator's vision of increasing penetration and offering insurance to all. The company is committed to enhancing the digital experiences of customers, distributors and employees and offer right products to the customers. Further, we will continue to explore new partners, leverage existing partnerships and launch new products that meet customer needs and provide seamless customer experience. Thank you very much for your patient hearing. Now we are happy to take any questions that you may have.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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 is from the line of Avinash Singh from Emkay Global. Please go ahead.
Yeah, hi. Good evening. Great set of performance and strong numbers all across. Couple of questions. The first one is more around the growth outlook for FY 2024, considering what has happened or what is happening around the regulatory front or tax front, and how your sort of a quarter four had gone by. Because if I recall correctly, last year you started with a strong growth momentum, but growth throughout the year has slowed. In the backdrop of some kind of a directionally the growth and margin trajectory for FY 2024, again, I'm not going to see quarter-on-quarter. That's one. Second is again, more around your key distribution channel that SBI.
Now with all sort of regulatory changes happening particularly on the commission front and all, there's some kind of a doubt or question in mind around exclusivity of the channel and also the kind of a, any sort of a pressure on payouts, if at all that, has sort of an impact on your either growth or margin trajectory. Thank you. We'll have other question.
Yeah, thank you very much, Avinash. you know, the growth outlook, if you ask me, we expect what we were expecting last year. The growth will continue and we will have a 20%-25% growth this year also. you know, we ended up with slightly less than 20%, you know, that is largely on the back of various other factors. If you ask me, the outlook remains similar because the demand is there. Insurance is a product which needs to be distributed. With all the regulatory changes, I think it has become easier to create better products, distribute them across.
With all these regulations which, you know, the commission regulation changes, the ULIP, all these things will lead to creatively designed products which can be beneficial for both the customer and the distributor and obviously for the company because you know that ensures sustainability. We continue or we look for or we look to continue the trend of growth. As far as the commission payouts, etc., are concerned, you know, we will definitely be looking at all our distribution partners and how, you know, we can increase the distribution of insurance products. The regulator has a vision of insurance for all by 2047, but then, you know, the aspiration is that it should be, it should happen before that.
To do that, we need to actually expand the market. You will notice that we are the probably one of the few companies which is actually selling more number of policies. NOPs, if you look at the NOP growth, we have a very healthy NOP growth at 14%. I don't believe anybody else has got a strong NOP growth. It's all mostly like, you know. You know, in the industry, if you see we are the ones which is growing the NOP.
On top of that, if you look at the kind of products that we are distributing and the, you know, principle behind our distribution, we keep the customer at the center and therefore anything that will be value accretive for the customer, which, you know, will be the guiding principle for us as always. The customer has to like the product, he has to need the product, and then, you know, we'll be distributing that. You know, obviously, you know, every distributor will have expectations of some good returns for the distribution that they do.
What we would like to see is that the value that we create for distributors who actually, you know, sell products we base products to the right kind of customers with more persistency with, you know, where value is created for the customer as well as for the company. There we may look at, you know, some kind of a new creative products which can, you know, then, share a higher amount with some of the distributors. That is something which we will be definitely looking at with the new flexibilities that are available to us.
Okay, sir. I mean, SBI and SBI Life relationship remains as it is.
Well, I, what I would like to say is that, like I said, you know, we will design products that will be good for the customer and which can be distributed well. There if, you know, if we see that the value is increasing and we are able to penetrate the market much faster, then obviously distributors will also be rewarded without losing the customer's value proposition.
Okay. Okay. Thank you.
Thank you. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.
Thank you for the opportunity. I'd like to start off on the protection side. Your individual protection, while overall for the year it has grown, for the quarter four it seems like it has declined slightly compared to PCP. Could you tell us what's going on there? Because, you know, the other peers appear to be reporting a strong growth on the retail protection side. Just wanted to understand what's happening with SBI Life.
Yeah. you know, our protection has been growing year-on-year. Every year we have grown. This time we have grown 6% for the year. Yeah, you are right. Quarter four we have seen a slight decrease about 5%. you know, if you look at the general mood around the last quarter, you know, I think there was a little bit of talk, more talk about tax and things like that, and therefore, there were some, you know, some of the things that did not sell as much as the others. You know, the focus definitely is around what is happening around people's minds because the customer should be thinking about it.
We feel that going forward, protection being one of the areas which we feel is a very good product for the customer. We will continue to have our focus on protection. That, you know, it's a win-win for everybody. The customer gets maximum protection for the minimum outlay and we also, you know, the value that it gives to the company is also good. Therefore, protection focus will be there going forward. It's a good customer value proposition.
Got it. You know, a second question from my side. You know, SBI, as can be seen from the numbers, hasn't really benefited from the high ticket size policy demand and, you know, which gives you a, you know, much cleaner base in FY 2024. You know, if from the government's perspective, it looks like we are also moving away from a old tax regime to a new tax regime, which will have no deductions. Could you let us know what proportion of your customers will really be benefiting from the ATC benefit, and what could be the impact if that goes away?
Sir, we don't know about how many customers are claiming ATC. Our only anecdotal thing is the seasonality of the insurance business is coming down every year. ATC, according to us, is not such a big driver of insurance business as compared to past.
Yeah. One of the other things is that, you know, earlier there were only a few instruments which actually, you know, gave the ATC benefit. You know, that was a time when people used to either go for a FD or an insurance policy. I think now the people are realizing the need for insurance, and most of the people who buy insurance are people who want to buy insurance.
You know, more and more, I mean, more and more you will see, people buying insurance because they want insurance and they feel the need for insurance and not to save taxes. In any case, there are many avenues for ATC saving. Insurance, you know, is a unique product. It is the only product which gives you insurance, you know.
Got it. Last final, you know, one data digging question. Could you let us know within your ULIP product basket, how many people have a premium size or ticket size of more than INR 2.5 lakhs, and how many will be lower than INR 2.5 lakhs?
Right now, I, we don't have the information. I mean, I can't give you the information at this point. You know, I'll let this pass.
Sure. Okay.
Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.
Yeah, good evening, and thank you for taking my question. Just the first one on ULIP in general, to pass through it, we have not seen any growth for ULIP this fiscal year. I'm looking at all the channels as well, which is either banker, agency, other, we have seen a decline throughout. Our significance of ULIP in our overall APE has also come down. Just want to understand the thought process here around ULIP being a top product and how should we look at it for next year.
You know, ULIP is continues to be a very good product offering that we have. We have a very wide choice of products. If you see it's it's flattish, you know, at best if you see it's not really a decline or something like that. It's it is rather flattish. You will also see that we have some other product offerings which we didn't have earlier, you know, like for example, the Smart Bachat Plus. That has got very good traction last year. You know, the emphasis, especially from some of the customer side, given that the markets have not been setting things on fire, has been towards some kind of guaranteed products. You know, the COVID effect is also there.
A lot of people are worried about the future, and so they would rather go for guaranteed products. You know, really speaking, it's not a very large shift. Yeah, there is a significant shift that we can see, that is because we have these other products also. The product range that we have, overall we have a growth in our business, and it's only a question of, you know, interstate. There has been some shifting here or there. ULIP continues to be strong. I'm going forward, you know, I don't see that ULIP, you know, will lose its relevance or something. It is a very good product. These are very good products that we have for various segments.
Therefore, you know, probably this year we should see some growth in ULIP as well as, of course, a strong growth in other products.
Got it, sir. My second question just is on the, now the VNB margin at 30%. Can you comment a little bit about the ULIP margins as well? Where are they stacking up, and, you know, do we have further levers for margin expansion for next year, given that we are not seeing any growth in this product? How should we think about margins for next year?
Margins, we you know, we feel that margins are a question of, Like I said, you know, the customer value proposition. Really speaking, the, you know, margins are, you know, you can take margins only up to a particular point and that is as far as the margin growth is concerned. We expect margins to be around these levels. You know, we've been saying this for some time now. It could be 29, it could be 30, you know. I'm really not bothered about that because as far as long as my VNB is actually growing, value of new business is growing, as far as my EV is growing, I'm not really bothered about the exact number that comes out there.
To your question about ULIP, we have a significant positive margin for ULIPs. We will continue to, you know, sell ULIP profitably and also, you know, give a good value proposition to the customers.
Okay, sir. Last question, I have to be very quick about it. ULIP, you typically had like a 52-48 kind of % debt-to-equity ratio. In this whole changes related to debt, mutual funds, indexation going away, does this value proposition of the way we are used to sell our product, does that change going forward?
See, our what we have noticed is that our equity to debt in terms of ULIPs has actually increased. you know, we used to have a 60 debt, 40 ULIP equity kind of thing. Now we are more like 50 to 48 in terms of equity to debt. you know, I think it's, there may be some changes here and there, depending on the time, exact time when, you know, if the rates are going up or down or the markets are performing better or not. Given that we are giving very strong long-term returns on all our products in ULIP, I think the equity story is definitely likely to continue for some time.
Got it, sir. Thank you and.
Thank you.
Thank you. The next question is from the line of Madhukar Ladha from Nuvama Wealth. Please go ahead.
Hi. Good evening. Thank you for taking my question. I see, you know, on a quarter-on-quarter basis, there is a lot of volatility in the product mix. For example, the share of ULIP was about 51% in Q2, which went to about 65% and it's back to about 52% in Q4. What exactly sort of has played out? Is it by design that you operate in a certain way? Or, I just want to understand better as to how you do your planning and what sort of products are actually how sales is actually generated. Second, I know that this question has been sort of asked before, but do you have, you know, any broad product mix in mind, and...
Are there any sort of limitations as to how much non-par you can sell? That would help us understand what sort of product mix we should be modeling and where margins could actually come up at.
Yeah, you said it right. You know, it's an old question. I'll answer your second question first. It's an old question, and I will give an old answer, that we sell according to the customer need and not what we want to sell. You know, sometimes ULIP will be in demand, sometimes non-par guarantees will be in demand. As you will see, the proportions are largely, you know, within a particular kind of range. As we have said earlier, our non-par pickup was mainly on the back of a product which we didn't have in the portfolio, which we introduced last year before last, in fact, in March, and actually worked very well for our customers. That would be one of the things, you know, which we can see.
ULIP, like I said, is a very good, you know, basket of products that we have. These products will find favor with, you know, people who are aware of the financial markets, people who are looking for good returns, and we have given good returns in the past. Therefore, you know, that demand is going to be there. We have a plan overall for the year, and it has played out largely according to our plan. Coming back to your volatility, that is the whole thing, you know. That is why the volatility that you may see a little bit of, you know, selling more here or there.
It will depend a lot seasonally, geographically, depending on where people are, you know, having the demand, where people get the money, where people are thinking of doing their investments along with the insurance. You know, we should not forget the insurance proposition in all these products. That insurance need is there, and then there is a savings element along with it. Whichever way they want to take it, we are there to provide these products because we have all these products. Right now we don't have any limitation to the amount of what we will sell. You know, the non-par, I don't think I have a number limit on how much I'm going to sell non-par.
Understood. You mentioned that you're targeting 20%-25% AP growth. Would you say that your VNB would also track that kind of a growth number?
Obviously, you know, VNB is definitely a product of, you know, volume. One of the things is volume. One of the things is the product mix. Obviously, VNB is going to be there.
All right. All the best.
Thank you.
Thank you. The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Hi. Good evening. A few questions from my side. First, if you could just break up the investment variance number into the sub parts for the year. Second, you know, if I look at your real world assumptions over the last few years as a percentage of your investments, it seems that from FY 2020, 2021 onwards, it has increased a bit. Just wanted to get some idea of how confident are you on some of these assumptions. Lastly, on your non-SBI banker partnerships, if you can give some color on the counter share that you have across all these open architecture partners and how do you intend to scale those partnerships up over medium term?
Yeah. Non-bank, I'll come take your last question first. As far as the non-SBI partners are concerned, they are growing. The bases are smaller, but the growth is good. The need is there, the customers are there, and they are the ones who need insurance, and if they have not bought insurance earlier, obviously, you know, this is the time to sell insurance to them. I think a lot of the partners are also feeling the need to provide all the financial services to their customers, and this is an opportunity for them to increase their stickiness also, and also to provide a customer with a need which otherwise he would have to satisfy from some other stable. You know, that is likely to grow and continue to grow. We would also like to have new partnerships.
As we have already said, we are taking new partners. We are doing pretty well in terms of the existing partnerships that we have. We will continue to grow those partnerships especially because the customers are there, they need the products. That is answer to your third question. Coming back to one and two, I'll request Pritesh to give you a color on those numbers.
Sure. On your other question where you're referring to the real world, scenario, basically you're looking to the unwinding rate. I think this unwinding rate is basically expected yield of your portfolio. It's a portfolio weighted yield, which is function of basically composition of your portfolio and yield curve. If you look into that in the recent 3 years, what you're referring to, we are moving our composition also moving toward the non-par business. There is a mix coming in which is longer durations. You're also seeing the yield curve is also going up. As a result, you see the expected unwinding yield has gone up. If you see, if you compare, it's not a significant change. 2021 we are having 7.85%.
Last year 8.17%. This year 8.60%. You see the composition is coming, increasing and that, so the yield curve. It's, we are very sure that what we are assuming is a thing which is no assumption coming from it. Your actual portfolio, actual yield curve and for lock the yield. There is no assumption that we need to be worried about. Coming back to your economic variance, I think you're referring to, which is around INR 2,418. I think in my view, you should, if you are not showing economic variance, I think you should be asking more question. If you're showing less, you should be asking more question because it's a real reality.
If you see today, there is a lot of economic volatility, and this economic volatility really resulting into this economic variance. Nothing. We should not worry about those things. We should worry more about the ALM aspects and cash flow making perspective.
Just one small follow-up with the second question. Just wanted to get some idea on whether you have changed your expected equity return assumptions for the bank book.
No, no, nothing.
Okay. Sure. Thanks, and all the best.
Thank you.
Thank you. We have the next question from the line of Sahej Mittal from HDFC Securities. Please go ahead.
Hi.
One of the questions are these mainly margin? Could you clarify what kind this?
Sir, there's a lot of disturbance from your line.
Is it better now?
No, sir. It's, we're still getting a lot of disturbance. We can't hear you clearly.
I'll join back in the queue.
Yeah. Okay. Thank you. The next question will be from the line of Sanketh Godha from Avendus Spark. Please go ahead.
Thank you for the opportunity. Sir, some, it was reflected in one is numbers two, also in FY 2023. Our EV sensitivity to the interest rate seems to have gone up because that number in FY 2022 was less than 2%. Today it is 4%, closer to 4%. If I look along also the economic variance number, it is almost 6% of the opening EV, which for others who have reported the numbers is less than 4%. Just wanted to understand it seems that we have, HBL as a company has become more sensitive to the macro environment, compared to competitor peers.
Is it to do anything with respect to the hedging strategy, what we are using or something we need to read in between these numbers, please?
I think economic variance I've already explained. This sensitivity, this increase is happening only on account of the network. If you see that we have the network and network is, there's no corresponding liability. You see the sensitivity is going up. You also look into that we are writing some more non-par products as compared unitings things. Now, what is happening in non-par is you reserve, you're reserving ratio will be higher than the base assessment liability, and then you have the excess assets. This excess assets will have some volatility in the term of the interest rate. Also you rightly said that we are having the FFA. Our objective is to do the cash flow matching, which is a real world matching.
That's we try to do that. In that process, you do hedging and then you get some economic higher interest sensitivity. I would just to give a comfort to you that because it is a product of two things. One is that you are trying to as much as close hedging in the real world so that our economic balance sheet and real balance sheet should not be get impacted. Secondly, in view of the excess network which is not having liabilities, that is giving some of the side of higher sensitivity. There's no one we should not be worried about. Asset Liability Matching is very perfectly matched and liability is equally provided for.
Sir, just a follow-up to it because the network issue was even there in FY 2022, but the sensitivity was just 2%. It has almost doubled in the current year. Actually, the concern comes from there. Now, I understand that network doesn't have any liabilities and they are exposed and the market impacts those investments. But what given the number has doubled compared to the last year, so and on a bigger base. That's the reason I was just trying to understand.
Let me explain the things. What happened, you look into both the part. One is the portfolio mix. In non-par portfolio when you are writing non-par portfolio you are having the reserving requirement more than unit link. Because unit link your asset equal to liability and you are having need not to do any excess asset in your book. In case of non-par participating products you keep excess assets to match those statutory liability and this excess assets are keeping as a part of statutory balance sheet. This giving higher sensitivity, nothing else. This is just function of two things.
Sir, can you quantify that excess assets in the non-par book? How much portion we have?
See what happen is it is not because what happen there is a base assessment liability. There is a requirement that you work out you put some prudence. If you're writing high margin product, you have some additional prudence. Then there is a regulatory requirement you need to derive and other aspects. Difficult to quantify. We're not going to quantify that.
Got it. The last one, on margin. I think it's, as you know that as you value that every quarter you change the assumptions with respect to operation. That led to 80 basis improvement in the margin. Because I just wanted to understand this 80 basis, what was the biggest contributing factor, whether it was OpEx or persistency or something else which led to that additional benefit?
It is a mix of all of this. What happened if you see this, in all operating fronts, as you can see the my economic EV AOP, we make the operating variance in all the fronts, be it the mortality, be it expenses and be it the persistency. What we did that is a mix. We some part of those we have capitalized. In this 80 basis point there is some element of the expenses, some element of the persistency and some element coming from the reinsurance side because we get a better term on the reinsurance that we have improved there. That's the reason we get 80 basis point of improvement.
Got it, sir. Last one. See, we reported 30% margin based on 22% non-par mix. Is it fair to assume that going ahead, not to significantly deviate from our margin guidance, is the non-par contribution to remain in this range? Do you expect it to come down or go up if unit demand picks up? Maybe I know you answered this question, sir. Just wanted to understand that still we try to toggle the business so that non-par, non-par will continue to contribute around 22+ kind of a number.
May I understand your language to understand, you know, the whole, way the margin will go up or, you know, remain the same or whatever. You know, we don't have a magic crystal ball to see that thing. What I've said still stands. We will sell the products which the customers want. These are products which the customers really seem to like. The unit products, the non-par guarantee products that we have, we have some very good protection products, the T-Roc products. You know, the mix will change slightly here and there, and I'm not going to be able to guarantee to you that this will be at some particular percentage or the other. If that will answer your question.
Okay, sir. Thank you. That's it from my side.
Thank you.
Thank you. The next question is from the line of Neeraj Toshniwal from UBS India. Please go ahead.
Hi, sir. in the marks you mentioned that, maybe 20% or you are shy of 20% APE growth because of some factors beyond your control. Wanted to know what were those factors and how confident we are on delivering 20%-25% for the coming year or for the year 2024 rather?
You know, I can't point out a single factor or anything. There are many multiple things that have been taking place. As a company, you know, we try to grow. If you can see my agency force, my agency force has increased a lot this year. You know, we are like, if you ask me, there are a lot of development things that we are doing, and based on that, we feel that, you know, going forward, we will be able to achieve this, 20%-25% that we are looking for.
Yeah. The change in my question is more to do with change strategy because the bank growth has been very, very weak. If I look at the numbers, has bank focus has been on the deposits or how should one think about it? Obviously quarter four last year also was weaker, but this time on a lower base also it is a weak outcome. Anything to read it there?
I look at the business as a, you know, whole year kind of thing. There are seasonal variations. There are variations geographically and all. I wouldn't read too much into all this. 19% growth is very strong. I think on the kind of base that we have, a 19% growth and then to keep a margin of 30.1% on the value of new business, and to grow new business VNB by, how much is it? 37%.
37.
37% and EV by 14%. I think all these things are a very good indicator of growth. I mean, I can always look at a particular one week or something and say that, you know, the business was not there or went up or down or whatever. March is one of those things that you will see. There is growth in March, and, you know, it's a minor point here or there. It's been probably not as spectacular as we have been able to grow earlier. That is also a factor of what happened last year. The growth over March last year, you know, if the March was good, obviously, you know, we don't expect a spectacular growth over that all the time.
Overall, I would still say that my own idea is that we, with all the thing that we are doing in the company, we should be seeing 20%-35% growth.
Got it. On interest expense, still be coming back to that, how much would this have been coming from group savings? Because that wouldn't have been properly or might not be high, it's as close to non-par savings business what we do. Any color on that?
Which one?
On interest expense, we would be wanting to know, what has been the contribution or higher sensitivity coming from group savings business.
Not much. I think, we don't look much along this line of business, right? Basically our objective is to look into in totality. We have to balance the total balance and not a segment of things, and we try to manage that very thing. In group particularly, when you are referring to, we closely match our asset to the liability, and there is no, not much sensitivity coming from.
Got it. On the credit life, do you have the numbers handy? How much would have been the share of credit life within the group?
Yeah. That I can give you. Credit life,
In terms of AP?
INR 200 crore AP.
Mm-hmm. What corresponding last year same number?
Full year. You want full year numbers, right? Last year was INR 1,600 crore-INR 1,700 crore roughly. This year it is INR 2,000 crore roughly.
Mm-hmm.
This is not rated. Rated you take 1/3 .
Yeah, 10%.
This is for full financial year.
Okay. I was actually asking for Q4, not over.
Q4 is 54.
INR 540.
45, INR 540 crore last year and INR 620 crore current year. That is 23, FY23.
Got it. Got it. Thank you, sir.
Yes, thank you.
Thank you. The next question is from the line of Akshen Thakkar from Fidelity. Please go ahead.
Congratulations, sir, on concluding a great year. Just two follow-ups to the comments that you made earlier. One was around the growth. Could you just, you know, you always targeted that, you know, high growth, but could you just help us understand what are the products, what are the channels that make you hopeful for achieving, you know, the 20-25% growth that you outlined? That was one. Second was, you know, to the question on relationship with SBI Bank, you did make a comment that you are sort of amenable to looking at new products, which could be a win-win both for the customer and also for the channel partners.
Just wanted to understand from SBI Life's, you know, P&L or margin point of view, you know, if you do these products or terms of trade with SBI were to change, one concern that investors do carry is that does that land up impacting your VNB margins? Those two questions from my side, sir. Thank you.
One of the things we always say is that, you know, the whole idea of doing business is that it should be beneficial to your customer and all the stakeholders, you know. If you keep that in mind, then I think you get your answer out there. We will make sure that the customer gets a good value proposition and distributors are rewarded well for the kind of good selling that they will do. If they get good customers, if they get good persistency, if they get good, you know, good product mix, which, then, you know, gives us a good margin, obviously, you know, the distributor also gets a good proportion of that. As far as channels of growth are concerned, like I said, you know, we have very strong channels.
Three channels that are very strong now, SBI, agency, and, you know, other banks. Other banks on a smaller base, but they are likely to grow very well because the customers definitely need all the products that we have. Agency, as I said, you know, we are ending with, you know, March with 208,000 plus agents and this is an increase of over 62,000 agents over last year. When these agents are developed and activated and they will be activated over a period of time, some of them have become active, some of them will become active over time, and they will be more and more productive. We have one of the most productive sales, agency sales forces in the country.
In the private sector we have the most productive agency and therefore, you know, these are the and of course, SBI as a channel, so we have the potential out there. There are a number of customers who need to be covered with insurance, so going forward I don't see any dearth of avenues for growth.
All right. Thank you, sir.
Thank you.
Thank you. Ladies and gentlemen, we request you to restrict your questions to one question per participant. The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead.
Thanks for taking my question. I'm looking at your average policy term, and I believe on the non-par side, your average policy term is closer to around 27 odd years for the last four quarters as compared to around 19, 20, you know, in the previous year. What would be the reason for this, and do we expect this to sort of sustain?
When you see this is a product change, you know, so you have more of traditional non-par guaranteed, this is a longer-term product.
Payout period. Earlier it was endowment where one time money was getting paid. Now it is getting paid or spread over-
Yeah. We have a product which goes, you know, you pay 10 years, and then after from the 11th year, 25 years you get returns. You know, overall it becomes a 35-year product.
The margins between both the products would be substantially different?
No, no. Margin is similar to the thing. This product is a income variant of the endowment. Earlier we are having only income endowment variant. Now we have run the income variant which is selling more and margin is, you can see the margin because we are selling more proportion coming from this product and we growing the margin is similar to the both the variants.
ultimately do you see a challenge in kind of, you know, hedging this product as this kind of.
Not at all because we restrict to the premium paying term max to the 10 year and most of this is coming from 7 to 10 years. That perspective is mitigating this hedging. We don't see any challenge on that perspective.
Got it. Thank you very much.
Thank you.
Thank you.
Thank you. The next question is from the line of Sneha from Star Union Dai-ichi. Please go ahead. Sneha, the line for you is unmuted. You may go ahead with your question.
Hello.
How do you see the overall on the distribution mix? Which are the focal area we're planning to grow more over there for all the parameters? Could you guide us?
Yes. I think I already, you know, answered this question, before. Maybe you were not there on the call. What we have done is we have, more than 2 lakh, 8,000 agents, today. This is an increase of 62,000 agents this year.
Mm-hmm.
That is one of the things that we are doing. The other is of course, in SBI and the other banks. We have a good number of customers out there who still need insurance. These are the main channels around which we will be selling. Obviously, we'll be selling some people directly online and, you know, through other channel partners.
Okay. Got it, sir. Thank you.
Yeah, thank you. Mm.
Thank you. Ladies and gentlemen, that will be our last question for today. I would now like to hand the conference over to Mr. Mahesh Kumar Sharma for closing comments. Over to you, sir.
Yeah, thank you very much. In fact, thanks, to all the participants on the call who have, given us this, you know, given us so many insights and, given us this feedback, and also asked very relevant questions. We hope that, you know, all of you have a very good time investing. Stay safe and, have a, have a good evening. Thank you very much.
Thank you. On behalf of SBI Life Insurance Company Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.
Thank you.