SBILIFE posted a rebound in business premium with individual APE growing at 14% YoY in Oct'20 after reporting a consecutive decline for the past many months. During 2QFY21, the ULIP business declined 13% YoY but grew 166% QoQ from the troughs seen earlier. Protection growth remains robust both in individual and group segments and is expected it to remain strong. The revival in credit growth, with parent SBIN indicating that the retail disbursement run-rate is now higher than pre-COVID levels, further augurs well for SBILIFE. The company reported an improvement in persistency rate across cohorts, with...

The company has posted 27% growth in net premium collection to Rs 12857.95 crore in Q2FY2021, aided by 28% growth in the renewal business to Rs 7150 crore, while new business premium also jumped 27% to Rs 5940 crore in Q2FY2021. New Business APE eased 4% to Rs 2710 crore in Q2FY2021 from Rs 2810 crore in Q2FY2020. The Value of New Business (VoNB) fell 2% to Rs 510 crore in Q2FY2021, while VoNB margins...

The business for SBI life improved sequentially and annually, growing 28% YoY/71% QoQ as business across channels improve. The renewal premium grew 28% YoY/123% QoQ as persistency across tenure improved materially. The market share rose to 24.5% from 23.9% in Q1FY21. The growth was also witnessed from new Banca partnerships. Overall Banca partnership from non SBI is likely to have risen 71% YoY in H1FY20 but was lower 25% YoY in the SBI channel and lower by 21% YoY in agency. The agency productivity is...

SBILIFE reported a 28% YoY increase in GWP to Rs. 130.9bn in Q2FY21 driven by strong renewal premium and single premium, which grew 28% and 71% respectively to Rs 71.5bn and Rs 36.2bn. APE declined 3.5% YoY to Rs. 27.1bn but more than doubled sequentially. The savings APE declined 9.2% to Rs. 23.7bn while the protection APE grew 70% to Rs. 3.4bn. We expect SBILIFE's APE growth to be on par with the industry's. Individual savings APE declined 15% YoY to Rs. 21.1bn and comprise of 78% of the overall mix (Q2FY20: 88% Q1FY21: 75%). Although ULIP APE...

Strong recovery in GWP led by protection & group savings SBI Life delivered 28% YoY growth in GWP mainly from renewal & single premium, while some recovery in regular premiums. This has led to APE recovery with de-growth of -4%/-15% YoY in Q2/H1FY21 vis--vis -32% YoY de-growth in Q1FY21. New business was driven by group savings, protection and recovery in ULIP. This change in business mix kept the margins steady at 18.8% (PLe of 19.6%) as recovery in ULIP offset the protection margin benefit. Improving protection mix and other higher margin products will help...

Taking a less aggressive stance on par/non-par SBI Life Insurance (SBIL) reported NBP growth of 27.2% YoY in 2QFY21 and 15.1% for 1HFY21. APE declined by 3.6% YoY due to a 15.3% decline in individual savings business, which was in turn caused by ~13% YoY contraction in business. As of today, the company has stated that ULIP traction is far better and that people are coming back to buy ULIP products. On YoY basis, average ticket size in the ULIP segment was higher. Individual protection APE saw strong growth during the quarter, up 58.3% YoY. Growth is almost entirely led by higher volumes. Protection product with revised pricing has been filed with the regulator and the company...

We remain positive on the stock and maintain Buy with a Target Price of Rs 998 (2.8x FY22EV)

SBI Life Insurance reported a healthy set of numbers led by strong renewal premium and investment income. Higher actuarial liability and elevated claims were offset by steady opex, which led to reasonable PAT growth. Healthy NBP accretion led to elevated commission expenses at | 414 crore, up 1.5% YoY, 83.9% QoQ. Elevated commissions despite higher sourcing via banks (banca + others) were at ~87%. Higher commission expenses were offset by steady opex, leading to overall opex to come in at | 1003 crore vs. | 1014 crore in Q2FY20. Strong premium growth coupled with...

and revival in the ULIP business. It continues to focus on extracting more from its bancassurance and agency channels. Limited presence on the online platforms, however, is a dampener. The stock trades at FY22E P/EV of 2.1x, which we find...

Persistency improved across cohorts, with the highest improvement seen in 61st month (by 340bp YoY to 60.9% in 1HFY21), which aided growth in the Renewal business. The company continues to maintain cost leadership, with the total expense ratio declining to 7.7% (~220bp YoY improvement). 2QFY21 shareholders' PAT grew 131% YoY to ~INR3.0b (in-line). Overall, we expect SBILIFE to deliver 17% VNB growth over FY2023E. We further expect VNB margins to improve to ~21% and operating RoEV to...

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....

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...

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...

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.

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....