Ladies and gentlemen, good day and welcome to the SBI Life Insurance Company Limited Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be 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 this conference, please signal an operator by pressing the star key followed by zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Jhingran, Managing Director and CEO, SBI Life, for his opening remarks. Thank you, and over to you, sir.
Good afternoon, everyone. It is a pleasure to welcome you all for the results update call of SBI Life Insurance for the year ended March 31, 2026. We appreciate and thank you for your valuable time and efforts in analyzing the results and participating in the earnings call. Updates on our financial results are available on our website, as well as on the websites of both the stock exchanges. Along with me, Mr. Sangramjit Sarangi, President and CFO, Shri Santosh Chacko, President, Business Strategy, Shri Subhendu Bal, President and Chief Risk Officer, Shri Prithesh Chaubey, President and Appointed Actuary, and Miss Smita Verma, Senior Vice President, Finance and Investor Relations are present here. SBI Life delivered a strong performance during the year, demonstrating resilience in a dynamic operating environment. This was supported by a balanced approach to both product and distribution mix.
The company maintained an optimal blend of protection and savings products aligned with the evolving customer needs, while leveraging a well-diversified multi-channel distribution strategy spanning bancassurance, agency, and digital platforms. This enabled consistent and broad-based growth across segments. The year marked a significant phase for the life insurance industry, driven by key regulatory developments, including GST exemptions, measures supporting long-term sectoral growth, and the regulator's announcement on transition to the Indian accounting standards framework, aimed at enhancing transparency and quality of financial information. The company has adopted a phased and well-governed approach to Ind AS transition and proposes to seek regulatory forbearance for an adoption from April 1, 2027, with comprehensive preparatory measures already initiated. Looking ahead, the company remains confident in the long-term growth potential of the life insurance sector in India and its ability to navigate the evolving landscape with continued focus on profitable and sustainable growth.
Now, let me give you some key highlights for the year ended March 31st, 2026. New business premium stands at INR 425.5 billion with a growth of 20% and private market share of 21.4%. Individual rated new business premium stands at INR 219 billion with a growth of 13% and private market share of 22.9%. Gross written premium stands at INR 1,012.9 billion with a growth of 19%. Profit after tax for the current year grew by 2%, standing at INR 24.7 billion as compared to the previous year. Value of new business stands at INR 66.7 billion with a growth of 12%. VONB margin stands at 27.5% for the year ended March 31, 2026. Indian embedded value for the company as on March 31, 2026, stands at INR 807.9 billion. Our assets under management stands at INR 4.9 trillion with a growth of 9% over last year.
Solvency ratio of 1.90 as against the regulatory requirement of 1.50. We will now update you on each of the key parameters in detail. Let me start with the premium. Individual rated premium stands at INR 219 billion with a year-on-year growth of 13%, while retaining our leadership position with a 22.9% private market share and 16.5% total market share. It grew by 12.9% three-year CAGR, outperforming the industry average of 8.5%. Total new business premium is INR 425.5 billion with private market share standing at 21.4% and total market share standing at 9.3%. Group new business premium stands at INR 127.7 billion with a contribution of 30% in new business premium and year-on-year growth of 39%.
Renewal premium grew by 19% to INR 587.3 billion, which accounts for 58% of the gross written premium. To sum up, gross written premium stands at INR 1,012.9 billion with a growth of 19% over corresponding previous year. Annualized premium equivalent, APE, stands at INR 242.7 billion, registering a growth of 13%. Out of this, individual APE stands at INR 221.1 billion with a growth of 13%. During the year, a total of 22.2 lakh new policies were sold covering 22.7 million lives. The growth in sum assured reflects strong consumer confidence and increasing awareness of financial protection. Individual and group new business sum assured grew by 61% and 34% respectively year-on-year, while rider sum assured continued to expand, now accounting for 31% of individual sum assured. The company continues to advance its product diversification strategy through focused and well-sequenced initiatives.
During the year, product launches were aligned to key customer needs across child plans, protection solution, and the non-par guaranteed segment, resulting in encouraging traction. For the year ended March 2026, guaranteed non-par savings have garnered business of INR 42.7 billion with a contribution of 19% on individual APE basis. ULIP stands at INR 144.2 billion, contributing 65% vis-à-vis 70% last year. Protection business contributes 9% of APE and stands at INR 22.4 billion. We continue to maintain a strong focus on protection business, which remains a key pillar of our growth strategy. The protection segment recorded a year-on-year growth of 10% on APE basis. Individual protection APE is at INR 10.3 billion with a growth of 24% as compared to the previous year ended March 2025.
It is noteworthy that the pure protection category saw a strong growth of 122% on an individual APE basis, reflecting rising awareness and demand for comprehensive financial protection. The individual sum assured in the protection segment grew by 62%. Group protection APE stands at INR 12.1 billion. Credit life APE has grown by 14% and stands at INR 2.9 billion. Individual APE for participating products stands at INR 17.3 billion with an exceptional growth of 133% YOY. Par segment sum assured has shown a strong growth of 166%. 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 86.5 billion.
Moving to update on our distribution partners, with a strength of more than 59,000 CIFs, the Bancassurance business of SBI and RRBs contributes 60% of the total APE business. On an individual APE basis, it stands at INR 141.2 billion, reflecting growth of 11%. SBI branch productivity on individual APE terms stands at INR 6.0 million for the year, registering a growth of 10%. As on March 31st, 2026, agency individual APE stood at INR 68.6 billion, growing 15% with agent productivity at INR 2.6 lakhs. The channel witnessed a shift in product mix. Non-ULIP share increased from 34%-39% for FY 2026, supported by robust 76% growth in agency individual sum assured. The company added more than 120,000 agents on a gross basis. We opened 120 new branches this year.
This expansion is aligned with our vision to create infrastructure that supports the long-term development of our agency channel. The other channels, direct, corporate agents, other bank brokers, online, and web aggregators grew by 22% and contribute 11% of total APE. Banks other than SBI Group are also growing at 22% on total APE basis. We are investing in building our online business channel. For the current year, this channel has grown by 47% on APE basis. Moving to updates on profitability, our financial performance reflects the impact of GST and the revised labor law. Taking these factors into account, the company's profit after tax for the year ended March 31st, 2026 stands at INR 24.7 billion. Excluding this impact, profit after tax for the year ended March 31st, 2026 would have stood at INR 31.2 billion with a growth of 29%.
Our solvency ratio remains strong at 1.90, as against regulatory requirement of 1.50. Value of new business stands at INR 66.7 billion, reflecting 12% growth, driven by both volume growth and favorable shift in product mix. Despite the impact of GST, we have sustained a healthy margin of 27.5% for the year ended March 31st, 2026. Excluding GST impact, VONB would have been INR 70.3 billion, representing 18% growth with a VONB margin of 29%, an improvement of 150 basis points. Embedded value for the company as on March 31, 2026, stands at INR 807.9 billion with a growth of 15% over previous year. Excluding the one-time impact, EV stands at INR 813.6 billion with a growth of 16%. Return on embedded value stands at 19.7%, with embedded value operating profit standing at INR 138.6 billion.
Coming to operational efficiencies, our OpEx ratio stands at 6.1% and total cost ratio stands at 10.6% for the year ended March 31, 2026, as compared to 5.3% and 9.7% respectively for the year ended March 31, 2025. With respect to persistency of individual regular premium, 13th and 49th month persistency stands at 87.9% and 69.1%, showing an improvement of 53 and 107 basis points respectively. As mentioned in my opening remarks, asset under management stand at INR 4.9 trillion as at March 31st, having growth at 9%. Death claim settlement ratio stands at 99.4% for the year ended March 31, 2026. Our mis-selling ratio stands at 0.02%, which is one of the lowest in the private industry, and this is achieved through our consistent approach adopted at the company 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 to our customers. As we embrace the digital transformation, we remain committed to innovation and excellence, ensuring that we stay ahead in an increasingly competitive landscape. The company continues efficient usage of technology for simplification of processes with 99.7% of the individual proposals being submitted digitally. 57% of the individual policies are processed through automated underwriting. In conclusion, by embedding resilience and continuous improvement at the core of our culture and by strategically strengthening our key channels, we are well-positioned for sustained growth. Our unwavering commitment to delivering exceptional customer service not only deepens client relationships but also enforces our reputation as a trusted and leading force in the market. Thank you all, and now we are happy to take any questions that you may have.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Avinash Singh from Emkay Global. Please go ahead.
Yeah. Good evening. Congratulations on great set of numbers. Thanks a lot for the opportunity. A couple of questions. The first one, if I see persistency has done well across the cohort, barring 61st month, where it has seen a drop, likely it would be coming out of some ULIP during the COVID time the policy sold, and possibly that is the explanation. But in that context, I wanted to know, is that operating assumption changes that are kind of a negative in the VNB, are they kind of leading to some bit of a reset in persistency assumptions or there are other factors behind this marginal operating assumption changes? So that's one.
Second, again, if I look back how you have delivered over the last 10 years, and you have presented in a slide, I mean, in terms of your APE market share or individual APE market share or embedded value compounding. If we, again, were to look back those 10 years and break it into five and five. Possibly the first five, of course, coming from a lower base, had a very strong growth on all parameters, including the kind of a margin expansion and all. Now, if we look back, now when the margin is more or less stable, but expansion part is difficult, and of course the base of growth and everything is coming into picture, the growth is also going to be measured. In this backdrop, if I were to ask, what would be your aspiration over the next five years?
Again, I'm not coming off to quarterly volatility, but if I'm saying that, okay, what would be the number in terms of your retail APE growth or where the VNB on margin would come out for the next five years, what would you have to say? Okay, thanks.
On the first question to persistency, you are right, persistency would drop on account of the early business done in the COVID period. We know that. As far as assumption is concerned, as we always say that we keep this exceptional item separately and looking to the long-term view. We always keep mentioning that year-end we keep refine our assumption, looking to reflect the current experience. There are some changes in the mortality, some on the persistency. We also seen some improvement coming on account of the long-term protection improvement on the persistency. That's reflect in the VNB assumption. In this, 50 basis point is not a significant point. I will say there is no significant change in assumption. Is a combination of all minor refinement across all the assumptions, including demographic as well as expense and other parts.
Coming to growth prospects, you are aware that the company three year CAGR is at 12.9%, and last financial year we have grown by 13.2%. Going forward also, we intend to maintain the growth rate at around 14%, which has been our CAGR for last three to five years. We will continue to maintain this kind of growth rate in coming year also.
Okay. Lastly, if I can ask one more. I mean, this PAR, of course, in your mix it is still a smaller portion, but typically you have been more like a ULIP protection and guaranteed on PAR. What is your own intent or what is the demand factor that is bringing this strong growth in PAR?
The PAR product portfolio growth of this year has come on a lower base of the last year. Last year we had just a couple of products. This year we launched new products in the PAR category and we got very good customer response in this category. That has resulted in a very robust growth in the PAR segment in the current year. We have been a company which had dominant sales of ULIPs in the past, but as you are aware, you have been attending these analyst meet for last couple of years. Our focus has been to improve the product mix in favor of non-ULIP products also. If you look at the product launches in last couple of years, we have very good product launches in all three, non-PAR segment, PAR segment, and also in the protection segment.
This is our effort to improve the profitability of the company also by having a healthy product mix. We are happy that our strategy and our product launches are helping achieve this objective.
Thank you.
Thank you. Our next question comes from the line of Supratim Dutta from Jefferies. Please go ahead.
Hi. Thanks a lot for the opportunity. Hello, can you hear me?
Can you please be louder?
Yeah. Is this better?
Yeah.
Yeah. Thanks a lot for the opportunity. My first question is on what are you seeing with respect to customer behavior over the last two months, given you have been typically a ULIP-heavy company and last two months we have seen pretty significant volatility in the equity markets. Just wanted to understand how are customers reacting to that volatility and how is that shaping ULIP demand. How in this environment, hence, looking into FY 2027, how are you thinking about the product mix and product strategy, given you have a growth aspiration of 14% like you've highlighted? That's the first question. Second, again, like you rightly pointed out at the start that you have been looking at changing the product mix for the last two years in favor of non-PAR products.
Just wanted to understand what is the share of protection now within SBI Bank versus two years back, and what proportion of these policies overall in the SBI channel are being sourced through YONO. If you could give us some color there, that would be very helpful. Thank you.
Talking about the customer behavior in last couple of months there, you are aware the geopolitical events that are taking place, and that definitely is having some impact on the market, on the performance of the equity market also, and there are effects seen on the fixed income side also. But at the same time, if you look at the equity market, there are robust inflows into the mutual funds also. Overall, people, wherever they are seeing value, they are investing. That is what we have seen in the company. Our growth in February and March has been decent enough, and we have been able to meet our guidance for the year despite these events.
Going forward also, we expect to continue to have good sales growth in the coming quarter and coming year as well, depending, of course, upon month-to-month variation and we do not pay much attention to month-to-month and we like to keep our focus on our yearly goals and midterm goals. That is regarding your first question.
SBI, our share is 4%. 4% of shares for pure protection. Credit life is over and above that. Broadly that number has been flat. The mix has changed favorably from TROP towards higher proportion of pure protection. The premium numbers are not seen as a proportion. Obviously, absolute numbers have grown, but share has remained broadly constant, but sum assured we have seen significantly higher growth in the SBI.
Number of policies also.
Number of policies and sum assured also, basically because pure protection has significantly higher sum assureds.
Understood. If I could ask one last question. On the ULIP side, are you selling the higher sum assured ULIPs as well, the 20x, 30x sum assured products, or is it you're selling only the plain vanilla 10x cover products? If you could give us some clarity there.
No. As of now, we do not have higher sum assured ULIPs.
Okay. Do you plan to launch that this year?
We will look at the opportunity and decide in due course.
Got it. Thank you.
Thank you.
Thank you. Our next question comes from the line of Shreya Shivani from Nomura. Please go ahead.
Yeah, thank you for the opportunity. I had two questions. First is on the banker channel sales in the Q4 . It's actually de-grown YOY. Is it to do with the fact that March was a slower month for us? Was it coming from that or was there any other reason? Second question is, there was a media interview by the Department of Financial Services secretary, where he yet again raised the topic of banks should be open architecture, et cetera. Is there anything you can share with us? Because obviously it's a big part of our distribution mix and also what is our strategy on the distribution channel in case such a decision is finally taken by or mandated by the government?
First, talking about the Q4, there you would have noticed that the entire insurance sector had a sluggish kind of Q4, and that may be related to various events taking place geopolitically across the globe. Coming to our growth in Q4, as I already said that instead of looking month-to-month and quarter-to-quarter growth, we like to focus on the annual numbers, and we are happy that we have been able to meet more or less our annual guidance of 13%. We have maintained our three year CAGR, slightly higher than that in fact. Banker channel also has been able to meet our internal budget set for the year.
Regarding your other query, I would like to emphasize that SBI Life is now a 25-year-old company, and in this long journey, we have established various very robust system and procedure, and we have seen various regulatory changes coming at different point of times. You will appreciate that the company has been able to navigate all these regulatory changes with ease, and we have been growing at a consistent rate. We are not aware about this particular topic as of now, but we are very sure that any regulatory changes, we will be able to meet with a robust response.
Right. Sir, any just strategy on other channels. I know you've added a lot of agents and new branches, but on the other line item, what are the channels we would incrementally be focused on irrespective of what happens with the banker channel?
Agency channel, for the last two years, we have been strengthening a lot, and in fact, the contribution of agency channel in our distribution mix has improved in last couple of years. In addition to the agency channel, where we are opening more number of branches, adding more agents, having better productivity, we are also focusing upon our emerging business channel. Although as of now it is a small channel, but the growth rate and the investments being made in this particular channel are giving us good result. We will continue to invest in our direct channels on our website and direct channel sales. We are sure that this is also going to be a good formidable force in coming future.
Got it. This is useful. Thank you and all the best.
Thank you.
Thank you. Our next question comes from the line of Prayesh Jain from Motilal Oswal Financial Services. Please go ahead.
Yeah. Hi. A few questions. Firstly, just extending the previous question, has there been any communication from RBI in any form about open architecture or in form of offering more products at the bancassurance channel? Because the interview kind of stated that there has been some communication or request gone to the banks to adopt open architecture. Second is, if I look at your cost ratio, right, from FY 2024, your OpEx was at 4.9%, has gone up to 6.1%. Total was 8.9%, has gone up to 10.6%. Within that main thing, I think the product mix shifts possibly to a certain extent, but also you've opened more branches and the agency channel has seen a very stronger growth. So, how do you see the cost ratios moving from here on, whether there is any.
Do you think that you'll be capped at 10.6 or this ratio will kind of keep moving higher? Thirdly, while you talk about a 14% kind of APE growth, what would be your thoughts on margins going ahead with respect to VNB margins going ahead? Those would be my three questions. Thanks.
RBI guidelines are draft guidelines, in fact, are in public domain for last couple of months, and they are supposed to come in force from July 1st. It does not talk of open architecture, and we do not have any additional information other than what is in the public domain. As far as cost ratio is concerned, the impact on cost in this particular year, last financial year, is substantially coming from the GST impact, as I already talked in my opening remarks. The other factors regarding opening more number of branches, having higher IT spends for customer ease and the other processes, and spends on training our agency force and our CIFs. Those are the reasons which have resulted in slightly higher cost ratios. Going forward, I think these things have already panned out.
Other than strengthening IT, there is no other major expense planned in the near future.
Sir, just extending that question. GST is not one time, right? GST is going to be there for some time. It's a permanent thing, right? Unless we kind of really do some cost savings, which will bring down our costs. Right. From that perspective, how do you see the cost savings? My last question was on VNB margin trajectory going ahead.
That is what I said that now the GST is already in this cost of 10.8%. That has already been built in. We do not see costs going higher on account of this particular thing. Prithesh, would you like to talk about the margin?
I think the margin also, if you see, we have reflected the 27.5% margin that we already accounted for all the impact of GST. Last time also, we mentioned that we working to enhance the product mix and profile mix, and we are very sure that profile enhancement in the profile mix will able to absorb this impact of GST. Even you see the VNB Walk, closely we have offset, so the better product mix and some benefit coming from the interest movement has able to offset this impact of GST. That's the reason 27.5% we are reflecting into. As MD sir also mentioned that our expense are reflected, and we are looking to better product mix from current level with the growth of 14%.
We expect that our margin will be continued to be a similar range that we maintain about 26%-28% range that we're saying. Our endeavor is to report the margin of also 27% kind of things.
You will appreciate that despite the GST impact and other one-time impacts, we have been able to report VNB margin at the higher end of the range of 26%-28% that we had set at the start of the financial year. We stuck to our range, and we will continue to maintain that kind of margin in coming years also.
Absolutely commendable, sir, there. With all the costs, with all the one-time impacts in the margins in this year, and now we moving more favorably towards wanting to move our product mix more favorably, should we shift our guidance to 27%-29% versus 26%-28%?
I think we said 27%-28%, and we will stick to that.
Got that. Thank you so much, sir.
Thank you. Our next question is from the line of Madhukar Ladha from JP Morgan. Please go ahead.
Hi. Good evening. Congratulations on good numbers in a difficult operating environment. First question, in the EV walk, we see a very strong positive operating variance. If you can quantify how much is expenses, persistency, and mortality? If we have such a strong positive variance, then why are we strengthening our assumptions in the VNB? I wanted to get a better sense of why are we seeing this divergence in EV and then in VNB. Second, sir, our solvency is now at about 190%. We work at a 180% solvency. In terms of capital, what are your thoughts, any additional need, and how will you bridge that gap if required? Yeah, those would be my two questions. Thanks.
First on your question on the EV work, that we have always mentioned that as a company, when we set our assumption, we always have the long-term view, and we ensure that it is sustainable in long-term. That's always give us the very positive variance. If you see year-on-year, we keep reporting the positive variance by way of quality of businesses. This is not coming because we are using different conservative or prudent assumption. This is because our quality of business is reflecting much better than what we looked into. If I say most of the positive variance coming on account of the mortality, morbidity and persistency, and lesser on the expenses. That's where it's coming from. If I link with the VNB assumption, 0.2% is not a significant assumption change.
You appreciate that the products that we are currently selling in the new business and what has been affecting our existing book, both are slightly different. It's not exactly the same. It may not be fair to correlate the assumptions in the VNB with that of operating variance in EV. Generally reflective, there are maybe one or two product line which we have tried to increase or promote. They are minor refinement we did in the assumption for VNB. That's also, I will say, it is very emerging trends. As a company, we always look into and adopt this assumption. That's how you see the VNB and EV.
As far as solvency is concerned, you see the company is generating good cash accruals and strengthening its capital base through internal accruals only. We have not raised any fresh capital for strengthening our margin. This is efficient use of capital that is resulting in a solvency of 1.90 against the regulatory requirement of 1.50. Going forward, we are assessing the impact of the Ind AS and RBC also that is being discussed at the regulatory level for introduction in near future. We are keeping a very sharp eye and we will take appropriate calls at appropriate time.
Just one final follow-up. Can you split the economic variance between your debt and equity?
See, our economic variance is more or less the sensitivity that we show in EV. Majority you see the equity fall, and so major share coming from the equity and other part is coming from the bond. If you total 3.66, if you say around 2.15% coming from the equity and balance is from the bond.
Understood. Got it. All the best.
Thank you.
Thank you. Our next question is from the line of Sanket Godha from Avendus Spark. Please go ahead.
Yeah. Thank you for the opportunity. Sir, you said that our growth most likely will be in the range of 14% for next few years. If I look at your banca growth, maybe for last three years, it has been stuck in that range of 9%-11%. Just wanted to understand if the 14% growth has to be delivered, then there should be heavy lifting of the growth from the other channels, either agency or other relationships. Just wanted to understand if you want to give a color of that 14%, that 11% trend to continue in banca and it will be largely driven by the other channels in a way to drive the growth. That's my first question, sir.
As already being guided for last two years, we have been telling that we are strengthening our agency channel by opening more number of branches, by having more agents, by improving agents' productivity, et cetera. The clear focus is on further strengthening the agency channel and tapping all the opportunities that are available in this particular channel. We already have a robust share of agency business in the industry, and we want to further strengthen it. We have also guided that in the distribution mix also, we would like to have a greater share of agency channel, and that is already taking place if you look at the distribution mix in last couple of years. This 14% will be an optimum mix of the agency growth and the banca growth.
Sir, is it fair to say that the banca growth in that range of 10%-11% is a realistic number going ahead for us?
We do not divulge the different channels growth targets as such. This is the kind of base that we have been growing in despite all the circumstances and all, and you can say that.
No, sir. The reason I'm asking.
Yeah.
Yes, sir. The reason I'm asking this question is that if I assume the nominal GDP growth or inflation-led growth with the natural increase in the ticket size, that will be in the range of 8%-10%. Which means that a penetration in the banca channel largely being achieved, the growth in bancassurance will be predominantly driven by the ticket size increase. That's the reason I was asking that more realistic growth penetration being largely achieved, it's more ticket size-led growth, like 8%-10% or 10%-11% kind of a number.
No, our focus is also on the protection side. I will not say that the growth is coming only from the ticket size increase. If you look at the number of policies also, the protection segment is growing where the ticket size is very small, and there also we are getting substantial number of policies that has resulted in good protection growth also. We do not look at from quarter-to-quarter and month-to-month number, but we set our annual targets and medium-term targets and go around doing business on those lines.
And Sanket, the endeavor remains to further strengthen the penetration of customer base of bank. We are not saying we have saturated the customer base of bank.
The opportunities are there, and we are tapping all the available opportunities in the best possible manner.
Understood, sir. My second question is, again, on the margin. Sir, at the start of the year, you guided 26%-28%. At the start of the year, you did not have a GST impact. If I negate the GST impact, you actually ended up reporting 29%, instead of 27.5%. Which means you underguided probably on the margin. Just wanted to understand this 27%-28% what you're trying to guide now has an upside either because of the product mix or cost levers to play out in the next year?
This is a matter of perception. You can say underguided, or you can say over delivered. This is a matter of perception only.
Okay. No, sir. Sir, the realistic margins may be better than 28% is what I wanted to check, rather than being little conservative in that sense. Yeah.
It's not about the conservativeness. You see the only reason to deliver this margin despite the GST impact is, as a company, we are working on to improve the product mix. Correct? That's the reason we are able to absorb, almost absorb the hit on the margin. Why we're giving the higher ranges is, as you said, with the higher base, we are trying to grow with the 14%, and at the same time, we are also trying to achieve the better product mix. Making a combination that a product mix which give a better margin and hence better value, as well as maintain that 14% growth with such a higher value is not a very easy task. That's the range what we give. It give us some flexibility to play around to maintain the good growth rate as well as maintain the margin.
That's the reason we are tied to that. It's not about that we are giving a prudent or conservative guidance on the product.
Both growth and profitability, we keep a very sharp eye, and we adjust accordingly.
Understood, sir. Lastly, sir, two things. One is, in protection, can you give your premium mix or AP mix, individual protection, I mean to say, broken down into pure term and RWRP? Whether RWRP as a product has seen a natural lower demand because of the GST benefit which is available in pure term compared to RWRP. That's one thing. Second, last time in the call you said that you were working on regular pay deferred annuity plan. If you can give a bit of guidance or a color of how far you have come with the product, whether you are okay to launch that particular product in the current year or not.
Our endeavor is to launch this deferred annuity product in this quarter itself. We are aiming to go live by June. We should launch the deferred annuity. Otherwise, we'll go to the next quarter.
Understood, sir. On the protection side, sir?
Protection side, the number we'll give offline to you.
Okay. Understood. Thank you, sir. That's it from my side. Thank you.
Thank you. Our next question is from the line of Shobhit Sharma from HDFC Securities Limited. Please go ahead.
Hi, sir. Thanks for the opportunity, and congrats on a great set of numbers. My first question is on your agency channel. That channel has consistently grown year on year for last two-three years and have provided stability to your overall growth. What gives you the confidence? I understand you mentioned about the new agent additions and the new opening of the branches. Can you give us some color around these agents who have been recruited? Are these from the industry or are these new to the insurance business? And secondly, if you can give us some qualitative comments about the branches which has been opened in last two-three years. What's the business contributed by them? Or if you can give some color around the contribution of these newly hired agents over the last two-three years.
Agents are new to the insurance industry. There is no open architecture on the agency side. We have very robust system of hiring and training agents, and we are happy that the agent increase is also being equally met with the agent productivity. The good growth number is coming both from the side of increased number of agents as well as increased productivity. As I already said that we want to tap the opportunities available on the agency side. We are happy that today we have one of the strongest agency force in the market, in the private industry and the largest player also. A substantial portion of the industry mobilization is coming through SBI Life. We'll continue to focus on this particular channel and our training methods to our agents to further tap the opportunities that are available here.
Sir, any number around the business contribution from the branches which you opened in the last two-three years, or the contribution of agents whose vintage is less than three years?
We do not disclose those kind of numbers. You will appreciate that, of course, any branch which is newly opened, it takes some time to break even. These branches are well on track. We are satisfied with the contribution that is coming through these branches.
Okay, sir. Sir, second question is on your NOP count. Last three years, we have not seen the NOP count growing on the individual business side. We had seen very strong growth in Q3 on the NOP side. In Q4 again, it has turned negative. When can we expect our growth to be led by NOP instead of the growth in the ticket sizes? Last question is on the GST impact. I believe that the GST impact which we have seen during this year was actually permanent in nature, and we would have made changes in our actual assumptions. How should we think about the impact from next year onwards?
Should we see a similar kind of impact of 1.5% on overall margins or it would be on a higher side because this year we had an impact for only the second half primarily?
See, GST impact has already accounted for in the margin, the 27.5 is reflected. This is for the business done after September 2nd. Maybe next another half year we'll see some impact. I think this will be more or less similar level for the six months. That we have adjusted, and we are working to do the product mix profile so that offset that. That's the reason we are saying with the GST impact considering into reflecting our costs and all, we are able to deliver the margin that we have just given the guidance of 26%-28% range. There were no adverse impact going to be reflecting on account of GST. That's the part. Actual assumption GST basically in absence of the input cost, we are absorbing the GST payable and commission for our agents and distributor.
That's already reflected in that.
Okay, sir. On the NOP side?
I think NOP, we are giving this thing and we are hoping that once we come with the deferred annuity product, that also will help us to increase some of the NOP. Because we appreciate the single premium annuity, most of the high ticket size. When it will come to the deferred regular pay annuity, I think ticket size will be much lower than single premium, and the more earning people will buy these things. We expect that will help us not only to grow the annuity business, but also increase the number of annuitant that will buy the policy from us.
You mean to say NOP growth next year will be driven by the annuity product which we'll be launching in this quarter or the next quarter?
No, we are not saying that. We are saying that will help us to increase overall annuity business, not especially that only will do that. I think we have the complete suite of the annuity. We have the deferred annuity in single premium. We have the immediate annuity, and we have the NPS annuity. Within the annuity, we offer certain option. Now we are lagging only on the regular pay deferred annuity. By launching that annuity, we'll have a complete suite of annuity product available to the customer, and we expect that complete suite will help us to grow this line of business.
I think the confusion is he is talking about NOP, not only annuity. Overall NOP will also increase through other products, and protection products will especially help in increasing the number of NOP.
Okay, sir. Got it. Thank you, and all the best.
Thank you. Our next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Hi. Good evening, sir. My first question on the VNB mix. Now, I know that you don't give the margins across channels, and every channel has a different product mix. Let's say if you were to take FY 2026 for the last two years and assume a similar product mix, channel mix, cost structure, what would be the VNB contribution across some of these channels? Some qualitative color in terms of divergence between APE mix and VNB mix across channels, at least qualitatively. The second question is on the credit protect business for FY 2026. The growth seems to be a little bit on the softer side.
Going into next year, I just wanted to get some color on what are the attachment rates for SBI or what are the efforts that you're really undertaking to grow this business, because it's a relatively high margin business, I would assume. Finally, the third question is on the operating releases. Now, if I look at the last 10 years, ex-COVID, I mean, in almost all the years you would have delivered a positive release. Just in terms of the assumptions that you have built in the back book, how do you transition into IFRS? I understand you are taking the forbearance, but does this sort of robust risk management or prudent underwriting that you would have done give you any sort of benefit relative to any other company who should have probably taken a differentiated strategy on these assumptions?
One question on the data keeping question. If you can break the operating variance into mortality, persistency, and expense and others.
I will start with the last question. I think that I explained that most of the operating variance is coming on account of the mortality and persistency, and lesser is coming on the expenses. This is the thing. Second, on your question to the channel-wide margin, I think we don't disclose that. We don't drive particularly the product mix with the particular channel. We offer the product to all the channel. We pay the similar commission to the different channel, and they do that. That's the reason we don't disclose this and even don't look into those on the margin perspective for which channel we're driving this, because we look into the longer-term and company level margin creation on that. Third question, if I remember correctly, on your actuarial assumptions and quality variance.
I think that I mentioned earlier that most of the operating profit variance over the years, including the COVID periods, reflect the two sets of things. One is the quality of business the company is writing and the underwriting is one of the parts. If you write a better quality of business, you expect the experience will be much better. Secondly, we also look into how you see your sustainability in the longer term. When we set the assumption, we take a longer term view, and each and every time we will see that whenever we see the credible experience emerging and that's mandated to review our assumption and modify, we give that. Even the last year, we have capitalized quite a few, particularly for the persistency side, we capitalize some of the assumption, and that's the reason this year the persistency variance is slightly lower than that.
We'll continue to do that. Our view is to report the numbers, and the view is to not focus on the pricing and reporting as well, keep a longer-term sustainable view on that perspective. This is the third question. I don't want to comment how this will play out in IFRS 17 for us and how the others in the market. We normally avoid comparing our performance versus others. Definitely, if the company is having the longer-term sustainable assumptions, that will be in a better place, and that will also reflect in the IFRS regime as well.
On the banca credit line, we think 14% is reasonable growth, it's faster than the bank's loan growth. We have increased our attachment in home loans by a substantial amount.
Got it. Just one small follow-up. If I heard correctly, you mentioned that your persistency variance this year is little lower than last year. I think last year you were around INR 2.5 billion-INR 3 billion. That basically means that for this year, you almost had like INR 8 billion-INR 9 billion of positive mortality variance. I mean, is that a right understanding?
No, I'm not saying that. What I try to tell you that each and every time, whenever we see the credible experience and continuous positive variance coming into, that will revise and do that. When you revise, you'll get certain gap in that perspective. Nothing else.
Got it. Thank you and all the best.
Yeah, thank you.
Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, you are requested to please restrict yourselves to one question only. You may rejoin the queue if you have any further questions. Our next question comes from the line of Neeraj Toshniwal from UBS. Please go ahead.
Yeah. Hi. Just a follow-up on the credit line. This quarter, we see a big impact on the group credit. It's largely coming from GPI. Is that the right understanding, or how is the credit line panic quarter-on-quarter and why this quarter?
No, this quarter, the GTI business has come as compared to the credit life. That is the reason the quarter four growth in the group business has actually gone up.
Okay. Do we have numbers on how much is straight life and how much is group?
No. Quarterly, I don't have number. We will give you separate.
Okay. On the target mix, I think we have been mentioning that we will be likely around 60/40, 60 yield and 40 non-yield. I think we have already kind of achieved that. The mix will largely remain stable in terms of yield and non-yield will toggle around between non-par and par is the fair understanding, or we can further see yield change to some size?
No. We are driving as already in the initial remarks, MD has commented that we are driving for a right product mix in the longer run perspective. Today we are at 66-34. Depending upon the market, depending on the customer's choice, we are offering the products across geographies. We will continue to drive the better productivity or a balanced product mix rather, going forward. We will see how the experience will evolve. Yes, we are looking into the better product mix going forward.
Okay. I was coming from APE perspective. I think it's already 59 yield and the rest coming from non-yield.
Yeah. IRP basis, it is 66.
Yeah. I spoke about individual APE basis. You are talking about APE. That is 66-34.
Yeah, it is.
On non-par savings, are you taking or not taking any changes in IRR to kind of like others have been de-coupling of the GST impact? What is our strategy here? Because growth, while everybody has seen a decline, our decline has been little moderate compared to peers. Any commentary here or the strategy going forward?
I think non-par, if I answer correctly your question on the non-par IRR perspective. I think we continue to look into the interest rate movement and reprice the product. I think currently, if you see there are a lot of volatility in the yield curve, and this yield is not sustainable. That's the reason we're holding up. In the meantime, we have launched new non-par products that replace our existing non-par product, and that reflect the current yield. To some extent, we have passed on some benefit to the customer by launching this new product. We'll continue monitoring and regular monitoring. I keep saying that as a company, we'll keep doing this, adopting the dynamic approach as per interest rate sensitive product is concerned. Whenever we see this is a sustainable thing, we'll reprice and pass on the benefit to the customers.
We try to balance between those.
Sure. Thank you. That is it. All the best.
Thank you. The next question is from the line of Nidhesh Jain from Investec. Please go ahead.
Thanks for the opportunity. Yes, sir. Question is on VNB margin. If you look at the full year VNB margin, there is a 150 basis points impact of GST. That is for half year. Does it mean that for the full year, the impact would be around 300 basis points? Our starting margin, let's say, on a like-for-like basis is 26%. If the GST would have been implemented for the full year, which means that we have to show VNB margin expansion from 26% in FY 2027. That is the first question.
No, it's not the case. If you see the business retained post September is much higher than the H1. Secondly, we mentioned this when we declared the half-yearly result in September. We have already incorporated the GST impact in terms of the commissions on the renewal commission for the business retained prior to the September 22nd as well. If I summarize, I say that all the business retained after September 22nd, the GST impact and commission reflected for both first-year commission and renewal. For the business retained prior to September 22nd, the GST impact on commission and renewal as well. Thirdly, we have incorporated the actual expenses including GST when we report these things.
Most of the part of the impact of GST in terms of renewal commission on new business and external incurred, only they are left with the first year commission for the business written till 2022. It will not be, and if I remember correctly, we have quantified this number. We're expecting the annual impact maybe around INR 1.8-INR 1.9 kind of things if GST would have been implemented from the beginning itself.
Sure. Second, sir, as we move towards a non-banker channel over the next two-three years or the share of non-banker channel increases in our overall mix. On a ceteris paribus basis, wouldn't that have a negative impact on margin? Because we believe that banker would be a slightly higher margin channel versus non-banker. If we don't do anything on the product mix side, will that have a negative impact on our overall margins?
No. I don't think, and we don't think there will be any negative impact for us. In fact, any channel addition will bring value to the table by way of the fixed expense will get amortized and quality. I think that is going to add value to the company, and there would not be any negative impact on the margin.
Sure, sir. Thank you, sir. That's it from my side.
Thank you. The next question is from the line of Harshal Mehta from Asian Market Securities. Please go ahead.
Thank you for the opportunity. Two quick questions from mine. Firstly, as we know, actually we are in the early days in terms of IFRS.
Please be louder.
Hello. Is it better now?
Can you be a bit louder, please?
Hello. Is it better now?
Yeah.
Yeah. My first question was that we know that we are in the initial days of IFRS, but if you can give some initial thoughts on how the KPIs will be for [audio distortion] IFRS. That was one. Secondly, our strategy has been to focus on additional products, and within that, we have seen par growing significantly higher than non-par. Given the backdrop that we have recently launched a non-par product in January, how do you expect non-par as a category to move from here on?
See, as far as the IFRS is concerned, we are prepared. As you know, we have submitted the pro forma to the regulator for the last two financial years. As already mentioned in the initial remarks, we are going to have a forbearance for this fiscal. Next year onwards, we will be prepared to launch into the IFRS regime. We don't see anything as of now to bring in a KPI into the company's performance or to disclose at any point of time during this financial year. We will see first how it will evolve over the next two to three years' time, and then to bring in, because it has got implications into the business, because we cannot just bring the KPIs to the business, which will definitely look into different aspects as far as IFRS is concerned.
Second part, you asked about product.
I think even currently. See, par product is still a contribution around 7% at most and that's perfect. Non-par, we have launched even different. We do believe that the new launch in non-par receives a lot of traction on that. That will also bring the movement in the non-par. Again, if interest rate is going to be stabilized at current level, we will reprice and be better return. That also helps us to improve the growth of the non-par business as such.
Sure, sir. Thank you.
Thank you. Our next question is from the line of Samant Singh from PhillipCapital. Please go ahead.
Yeah. Thanks for the opportunity. Hope you can hear me. I'm audible?
You are audible .
Yeah. Okay. Just two data keeping questions. One was on online channel growth. That was very strong until nine months. Like 45% YOY basis. Anything on the discrete Q4 number or the full year number that will be helpful. The second is on attachment rate on the credit life portion. What is attachment rate on home loans? If you can just give two data points. Thank you.
As far as our online business, which is purely on our own website, it is almost in the similar range of 48%-50% growth, which we have done for the full financial year. That we will continue to focus more on this channel on our own. As far as the attachment ratio of credit life, I think it is going in the similar, what we have been doing it for the previous years, around 50% of.
Okay, thanks for these two events. Yeah.
Thank you.
The next question is from the line of Gaurav from MLP. Please go ahead.
Yeah. Hi, sir. Good evening, and thanks for the opportunity. Sir, the question was with regards to the cost ratio. If I look at the operating expense ratio, it moved up from 5.3% to 6.1% in FY 2026 versus last year. You explained that this is due to GST, impact of GST embedded in the cost now. Is it only from September to March, the cost impact that we are looking at here? Let's say for FY 2027, given that the entire year will have GST impact. Hypothetically, is this 6.1 only reflective of six months of GST, or this includes the full year impact of GST?
This is obviously the second half of this year, half year of this fiscal, the impact of the GST. Next year, it will be full year. The other one-off item, I think you must have heard in the last call that there is a new one-off item, which is the labor code. That has also this year is impacting this increase in the operating expenses. We are confident that it will not go under our radar. Rather, in the way we are managing the expenses of the company, it will continue to be in that range.
Sure. Sir, if you can just quantify the deviation from 5.3%-6.1% that we see, how much of that is attributable to GST and how much of that is attributable to new labor code? If you can just quantify that.
I can just tell you that if the labor code or the GST would not have been there, then the OpEx ratio would have been around 5.5% against 5.3%.
Okay. Understood, sir. Got it. Safe to say that next year it may go up slightly given that this only has six months of GST, but it won't go materially up from here. Is that the right way to read it?
Not necessarily, because the OpEx is not only one-off item of the GST which will impact. There are other measures which we take, so that will also help to rationalize the cost.
We also look into the economics of the expenses, where we want to do, whether we want to do or not. Yes, as far as the growth is concerned, we are very focused that we will spend our money on the investments, particularly on the branches, IT infrastructure, that will continue. It will not have much impact as far as the OpEx is concerned for the company.
Understood. Perfect. Sir, the next question is on the channel mix. While this year we saw other channels contribution share increase. For next year also, do you expect the other channel contribution share to improve? Let's say from a two to three year perspective, what would be the, let's say, SBI contribution or any target sort of you are maintaining to reduce the contribution from SBI going forward?
We are not targeting any reduction from SBI. What we are targeting is tapping additional opportunity on the agency and the emerging business channel. In line with that, the higher growth coming from these two segments will improve their contribution in the overall distribution mix. We are not targeting any reduction from SBI.
Understood. With the effect of diversification, where would you see the overall mix, let's say ex-Banca and within Banca, maybe ex-SBI, what would be, let's say, target share of these other segments that you want to keep?
In last two years, we have seen approximately 3%-4% shift from Banca to agency and emerging businesses and all. We expect the similar trend in coming years also.
Understood. That's all from my cycle. Thank you.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Amit Jhingran for closing comments. Over to you, sir.
Thank you everyone for your time and queries. You may get in touch with our Investor Relations team in case you have any follow-up questions, and we will be happy to respond to that. Thanks again. God bless everyone.
Thank you. On behalf of SBI Life Insurance Company Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.