Valuation and Outlook: We have valued the stock based on 3.2x forward P/EV and 36.3x forward P/VNB with a premium of 1.02x and has arrived at a price target of Rs. 988 with a potentialupside of 13%. We rate the stock as HOLD'.

SBI Life Insurance Company Limited, is a joint venture between SBI and BNP Paribas formed in 2001, which offers individual and group insurance plans, including traditional and unit linked plans. Its products cover life, health,...

SBI Life Insurance Company (SBIL) was established as a JV between State Bank of India and BNPPC, an insurance subsidiary of BNP Paribas. SBI Life has a big advantage due to its bancassurance with State Bank of India. Diversified product mix

ICICI Prudential Life: We like IPRU's re-engineered business model, which is focused on a more diversified product mix (increasing PAR + NPAR) along with an increased protection share. We, however, remain wary of the current COVID-19 situation and believe that outlook for FY21E remains challenged and build in a 16.3% decline in FY21E VNB; post which we expect VNB to grow at FY21E-23E CAGR of 18.5%. In our opinion, a difficult FY21E is most likely to delay achieving the goal of doubling VNB by FY23E. We downgrade our rating on IPRU to REDUCE with a DCF-derived target price of Rs 445 (Mar-21E EV + 23.6x Mar-22E VNB). The stock is currently trading at FY21/22E P/EV of 2.5/2.2x and P/VNB of 30.2/23.3x. Key risks are lower-than-expected growth, protection share or higher mortality as a result of the pandemic. SBI Life Insurance: Over FY21E we expect covid-19 and changes in personal taxation to cause significant disruption to insurance sales (FY21E APE: -13.1% YoY). We however take a longer term view on the business and appreciate the strong distribution footprint of its parent SBI (24k+ branches), improving protection share (1QFY21: 12.6%, +137bps YoY), lowest operating cost ratios (1QFY21: 10.1%). We expect SBILIFE to deliver healthy FY20-23E VNB CAGR of 6.6% and RoEVs of ~13.4-15.4% over FY21-23E. We retain our BUY rating on SBILIFE with an unchanged TP of Rs 975 (Mar-21E EV + 28.9x Mar-22E VNB). The stock is currently trading at FY21/22E P/EV of 2.8/2.5x and P/VNB of 31.2/25.1x. Lower growth, renewals, and protection share are key risks....

SBI Life Insurance (SBIL)'s VNB margins improved by 80bps YoY to 18.7% during Q1FY21. Improvement was led by increasing share of group protection plans and savings products. Absolute VNB de-grew by ~29.7% in Q1FY21 on account of lockdown. However, renewable premium witnessed growth of ~29.5% YoY.

SBI Life's overall APE declined by 35% YoY as FYP de-grew by 34% YoY and despite 30% growth in single premium. Renewal premiums were also better growing 30% YoY, although 13M persistency (regular pay) saw weakness by110bps at 82.6% over FY20, while other buckets saw improved trends. Overall APE was slower on slower protection growth both on individual & group (lower loan attachments), while growth has been led in group savings showing lower reflection in APE growth. Margins at 18.7% were slightly lower than expectation dragged by not passing re-insurance rate hikes which it will...

1QFY21 proved to be another tough quarter. SBI Life Insurance (SBIL) reported a decline of 29% YoY in individual new business premium and a 32% YoY decline in overall APE. Though June 2020 has seen significant pick up in business, we remain cautious on the full year growth outlook. Group new business premium grew by 34% YoY to Rs17.2bn while the renewals saw robust growth of 30% YoY. ULIP APE was down 51% YoY while non-par saw substantial growth of 360% YoY. Guaranteed business is unlikely to be a major focus area, though the company remains open to cater to the demand as long as it can reprice it to the extent that the profitability is maintained. Overall, the individual savings business...

Challenging Years Ahead for Industry Leader: SBILIFE's 4QFY20 performance was marginally below expectations, as NBP/APE declined 11.8/12.6% YoY due to the lockdown

SBI Life Insurance Company Limited, is a joint venture between SBI and BNP Paribas formed in 2001, which offers individual and group insurance plans, including traditional and unit linked plans. Its products cover life, health,...

medical services whereas normal business growth was led by protection (marketing the increase in rates was one factor) and push from online channel sales. We believe, May & Jun should trend with similar de-growth numbers and will pick up only in 2HFY21....

We rate SBILIFE a BUY with a reduced TP of Rs 975 (Mar-21E EV + 28.9x Mar-22E VNB). SBILIFEs 4QFY20 performance was marginally below expectations, as NBP/APE declined 11.8/12.6% YoY due to the lockdown, while VNBM sustained at 20.7% (+90bps YoY). Despite SBILIFEs ambition to post APE growth in FY21E, given the macros, we remain skeptical.

SBI Life reported a largely stable fourth quarter with PAT growth of 16% YoY to Rs 5.3bn on moderation in change in valuation of policy liabilities. APE declined by 13% YoY on ULIP sale decline of 15%.

SBI Life Insurance (SBIL) has reported a weak quarter due to the national lockdown impacting sales in the last 10-15 days of March20. NBP for the quarter was Rs38bn (9% below our estimate), down 11.9% YoY. APE in 4QFY20 was down 10.8% YoY at Rs26.5bn. Segment wise, ULIP business was down 14% YoY and par business was down 50% YoY. Individual protection sales were subdued, growing by 6% YoY while group protection sales were up 67% YoY. For FY21, the traction on protection is expected to be better, partially on account of higher customer preference. On the other hand, we believe that having a higher debt component in the ULIP business gives company the confidence to keep selling linked products. As per the...

Premium accretion witnessed moderation amid the Covid-19 lockdown at the end of the quarter. Despite moderation in premium, focus on investments (net MTM loss of ~| 75 crore for shareholders) and higher shareholders surplus enabled better profitability. Opex growth witnessed a dip at 7.9% YoY to | 1180 crore with opex ratio steady at 9.9%. Moderation in new business premium & investment loss led to a decline in topline, offset by a decline in actuarial liability resulting in healthy policyholder surplus at | 659 crore. Such high surplus led to betterthan-expected earnings at | 531 crore; up 16% YoY. Volatility in market led...

Protection Guaranteed and Annuity Protection is Paving Way to Protection Segment Rise: Value of new business APE has increased

Yet another strong quarter for insurance giant SBI Life Insurance Company Limited, is a joint venture between SBI and BNP Paribas formed in 2001, which offers individual and group insurance plans, including traditional and unit linked plans. Its products cover life, health,...

SBI Life Insurance (SBILIFE) among private life insurers possesses by far the largest bancassurance network, bancassurance network size being most critical for scalability. Its individual agency force is highly productive among key private sector life insurer peers leading to cost efficiencies.

Stable quarter; focus on protection to increase; maintain BUY BUY SBI Life Insurance (SBIL) reported 3QFY20 results with the key pointers being (1) SBIL saw new business APE and new business premium growing 22% YoY and 35% YoY, respectively. Traction in protection to pick up (2) APE margin improved 80 bps YoY to 18.3%, driven by improved product mix (3) SBI Life's cost leadership was reinforced with opex ratio declining by 6bps YoY to 5.5% in 3QFY20. Persistency experience continued to improve rapidly. Also, see comprehensive conference call takeaways on page 2 for significant incremental colour. Per se, on the key financial items, SBIL posted NBP growth of 28% YoY at Rs49,706mn, Surplus growth...

AUM growth remained healthy at 22% YoY to | 164190 crore. Income from investment surged at | 4073 crore in Q3FY20, leading to higher trajectory in topline. Operating expenses (commission and opex related to insurance business) grew 23.8% YoY in Q3FY20 to | 1097 crore. Led by robust...

Given the strong distribution footprint of its parent SBI (24k+ branches), improving protection share (9MFY20: 8.0%, +174bps YoY), lowest operating cost ratios (9.1%), and improving margins (VNBM: 20.5%) we expect SBILIFE to deliver strong FY19-22E VNB CAGR of 23.3% p.a. and RoEVs of ~18-18.5%. Lower than expected growth and protection share remain a key risk to our call. SBILIFEs 3QFY20 performance was a mixed bag, as NBP/APE growth was strong at 26.8/16.3% YoY; however decline in protection/NPAR share to 6.8/5.7% (-27/-573bps QoQ) was disappointing. Strong 9MFY20 adj. VNBM at 20.5% (+30bps vs. 1HFY20) compensated. SBILIFE is our top BUY with a TP of Rs 1,230 (Dec-20 EV + 25.4x Mar-22E VNB).