SBI Life Insurance Company Share price and Fundamental Analysis

Company History

SBI Life Insurance Company Limited (SBI Life), established in 2001, is a Joint Venture between State Bank of India (SBI) and French Financial Institution, BNP Paribas Cardif S.A. and is one of the leading life Insurance companies in India. SBI has an unrivaled strength of over 35,500 branches across the country, making it the largest banking group in India. BNP Paribas Cardif S.A. is the life and property & casualty insurance arm of BNP Paribas, one of the strongest banks in the world.

The Company's life insurance business comprises of individual life and group business, including participating, non-participating, pension, group gratuity, group leave encashment, group superannuation, group immediate annuity, unit-linked insurance products, variable insurance products, health and micro insurance. Some of these policies have riders such as accident and disability benefit, level term and critical illness.

SBI Life Insurance Company Limited was incorporated as a Public Limited Company at Mumbai on October 11, 2000 and received Certificate of Commencement of Business from the RoC on November 20, 2000. The Company is registered with the IRDAI for carrying out business of life insurance pursuant to the Registration Certificate dated March 29, 2001.

During financial year 2002-03, SBI Life launched Bancassurance channel. It also paid its first claim during the year. During financial year 2004-05, SBI Life's Assets Under Management (AUM) crossed Rs 1000 crore mark. In January 2005, SBI Life launched unit-linked product. During financial year 2005-06, SBI Life became the first new generation private life insurance company to make profit; the company registered profit after tax of Rs 2.03 crore for the year.

During financial year 2007-08, SBI Life's Gross Written Premium (GWP) crossed the milestone of Rs 5000 crore and AUM crossed the milestone of Rs 10000 crore. The company also achieved cumulative breakeven during the year, wiping out all accumulated losses. During the year, the company's share capital increased by Rs 500 crore to Rs 1000 crore. During financial year 2009-10, SBI Life's GWP crossed the milestone of Rs 10000 crore. During financial year 2010-11, SBI Life's branch network crossed the milestone of 500 branches.

During the financial year 2011-12, SBI Life achieved the milestone of profit after tax (PAT) of Rs 500 crore; the company reported PAT of Rs 556 crore for the year. It also declared a maiden dividend of 5% during the year.

During the financial year 2012-13, the company's AUM crossed the milestone of Rs 50000 crore and the number of branches crossed 750.

During the financial year 2015-16, SBI Life's GWP crossed the milestone of Rs 15000 crore.

During the financial year 2016-17, SBI Life's renewal premium collection crossed the milestone of Rs 10000 crore. Also during the year, Value Line Pte Ltd and McRitchie Investments Pte Ltd. bought stake of 1.95% each in SBI Life from SBI.

SBI Life Insurance increased its market share of New Business Premium generated among private life insurers in India, from 15.87% in Fiscal 2015 to 20.04% in Fiscal 2017. Between Fiscal 2015 and Fiscal 2017, the Company's New Business Premium generated increased at a CAGR of 35.45%, which is the highest among the top five private life insurers (in terms of total premium in Fiscal 2017) in India.

In Fiscal 2017, SBI Life Insurance enjoyed a market share of Individual Rated Premium of 20.69% among private life insurers in India and 11.16% of the entire life insurance industry in India. Between Fiscal 2015 and Fiscal 2017, its Individual Rated Premium increased at a CAGR of 37.90 %, the highest among the top five private life insurers (in terms of total premium in Fiscal 2017) in India. The Company has also issued the highest number of individual life policies annually among the top five private life insurers (in terms of total premium in Fiscal 2017) in India since Fiscal 2014.

As of June 30, 2017, SBI Life had a comprehensive product portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs of diverse customer segments. Its individual products include participating products, non-participating protection products, other non-participating products and unit-linked products, which contributed 10.77%, 0.95%, 1.69% and 50.36%, respectively, of its New Business Premium in Fiscal 2017; while its group products include credit life group protection products, other group protection products, group fund management ('Group FM') products and other group products, which contributed 2.72%, 1.14%, 31.73% and 0.65%, respectively, of its New Business Premium in Fiscal 2017.

During the financial year 2017-18, SBI Life achieved AUM milestone of Rs 1 lakh crore.

State Bank of India offloaded 8 crore shares and BNP Paribas Cardif S.A. offloaded 4 crore share of SBI Life Insurance Company via an initial public offer (IPO) during the period from 20 September 2017 to 22 September 2017. There was no fresh issue of shares by the company. The stock debuted on BSE at Rs 733.30 on 3 October 2017, a premium of 4.75% compared to the IPO price of Rs 700 per share.

On 24 September 2018, SBI Life Insurance Company Limited announced that it has been informed by BNP Paribas Cardif SA (BNP Paribas Cardif) that BNP Paribas Cardif may consider reducing its shareholding in the company to ensure compliance with minimum public shareholding requirements in accordance with applicable law. In this context, BNP Paribas Cardif has also confirmed that it is yet to make any firm decisions regarding the size, timing or nature of such potential reduction in their shareholding of the company. Accordingly, further updates will be provided in compliance with the applicable law.

During the year 2018, the Company collected New Business Premium of Rs. 109.66 billion, comprising of Rs. 68.42 billion from Bancassurance' which represents company's largest distribution network, Rs. 27.48 billion from Retail Agency, and Rs. 13.76 billion from other distribution channel, including direct sales, sales by non-bancassurance corporate agents, brokers, micro agents, common service centres (CSC), insurance marketing firms (IMFs) and Web aggregators.

During the FY 2018, the Company had completed its Initial Public Offer ('IPO') by way of an Offer for Sale (OFS) of 120,000,000 equity shares of face value of Rs. 10 each of the Company at Offer Price of Rs. 700 per equity share aggregating to Rs. 83.89 billion, by the Selling Shareholders' State Bank of India and BNP Paribas Cardif S.A. of 8,00,00,000 equity shares and 4,00,00,000 equity shares, respectively. The shares of the Company were listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) on 03 October 2017.

During the FY2019,the Assets under Management (AUM) registered 21.3% growth to Rs 1,410.24 billion as against Rs 1,162.61 billion reported at the end of the previous financial year. The company's new business premium reported an impressive 25.8% growth. The individual new business premium grew by 14.6% to Rs 96.36 billion in FY 2019.

During the year 2018-19, BNP Paribas Cardif S.A. (promoter) has sold 142,992,908 equity shares of Rs 10 each at an average price of Rs 537.34 per share for a consideration of Rs 76.84 billion. This has resulted in dilution of BNP Paribas Cardif S.A. stake by 14.30% to 7.7% as on 31 March 2019.

The company was recognised as The Economic Times Best Brands 2019' by The Economic Times. The company also Won the Life Insurer of the Year 2019 - by Federation of Indian Chambers of Commerce (FICCI).

As at 31 March 2019, the Company has 908 offices, 123,613 Insurance Advisors (IAs) and 58,995 Certified Insurance Facilitators (CIFs) across the country.

During the FY2020,the New Business Premium (NBP) has increased by 20% from Rs 137.92 billion to Rs 165.92 billion in the previous year. The AUM has grown by 14% from Rs 1,410.24 billion as of 31 March 2019 to Rs 1603.63 billion as of 31 March 2020 with debt-equity mix of 79:21.

As at 31 March 2020, the Company has 937 offices, 130,418 Insurance Advisors (IAs) and 53,096 Certified Insurance Facilitators (CIFs) across the country.

During the year 2019-20, State Bank of India (Promoter) has sold 4.5% stake i.e. 45,000,000 equity shares of Rs 10 each at an average price of Rs 785.18 per share for a consideration of Rs 35.33 billion. BNP Paribas Cardif S.A. (Promoter) has sold 2.5% stake i.e. 25,000,000 equity shares of Rs 10 each at an average price of Rs 680.77 per share for a consideration of Rs 17.02 billion.

During the FY2021,New Business Premium (NBP) has increased by 24% from Rs 165.92 billion to Rs 206.24 billion.The AUM has grown by 38% from Rs 1,603.63 billion to Rs 2,208.71 billion with debt-equity mix of 73:27.

As at 31 March 2021, the Company has 947 offices, 170,096 Insurance Advisors (IAs) and 50,240 Certified Insurance Facilitators (CIFs) across the country.

During the year 2020-21, State Bank of India (Promoter) has sold 2.1% stake i.e. 21,000,000 equity shares of Rs 10 each at an average price of Rs 744.05 per share for a consideration of Rs 15.63 billion. BNP Paribas Cardif S.A. (Promoter) has sold 4.99% stake i.e. 50,003,480 equity shares of Rs 10 each at an average price of Rs 911.28 per share for a consideration of Rs 45.57 billion.

New Business Premium (NBP) has grew by 9% to Rs 33.4 billion in Q1of FY 2022 with 29% growth in First year premium. The AuM has grown by 32% from Rs 1,753.5 billion as on 30 June 2020 to Rs 2,315.6 billion as on 30 June 2021 with debt-equity mix of 72:28.

New Business Premium (NBP) has grew by 14% to Rs 102.9 billion in H1of FY 22 driven by strong growth in regular premium business by 47%. The AuM grew by 31% from Rs 1,863.6 billion as on 30 September 2020 to Rs 2,441.8 billion as on 30 September 2021 with debt-equity mix of 70:30.

New Business Premium (NBP) has grew by 30% to Rs 187.9 billion in 9M of FY 22 driven by strong growth in regular premium business by 36%.The AuM grew by 23% from Rs 2,095.0 billion as on 31 December 2020 to Rs 2,568.7 billion as on 31 December 2021 with debt-equity mix of 71:29.

As at March 31, 2022, the Company has 952 offices, 146,057 Insurance Agents (IAs) and 53,649 Certified Insurance Facilitators (CIFs) across the country.

During FY 2021-22, the Company launched 5 new products, like SBI Life - Swarna Jeevan Plus, SBI Life - eShield Next, SBI Life - Smart Platina Plus, SBI Life - Saral Pension and Arogya Shield. On launching the mandatory Standard Individual Immediate Annuity Product, SBI Life - Saral Pension, the existing individual pension savings product SBI Life - Saral Pension was renamed as SBI Life - Saral Retirement Saver. It issued 1.92 million policies during year 2021-22.

The Asset Under Management (AUM) of the Company as on 31 March, 2022 was 2,674.09 billion. In FY2022, Gross Written Premium (GWP) has increased by 17% to Rs. 587.60 billion. New Business Premium (NBP) has increased by 23% to Rs. 254.57 billion.

During year 2022, the Company collected New Business Premium of Rs. 254.57 billion, comprising of Rs. 133.92 billion from Bancassurance' which represents Company's largest distribution network, Rs. 46.17 billion from Retail Agency and Rs. 74.48 billion from other distribution channel which includes direct sales, sales by corporate agents, brokers, Point of Sale persons (POS), insurance marketing firms (IMFs) and Web aggregators.

As at March 31, 2023, the Company has 992 offices, 2,08,774 Insurance Advisors (IAs) and 58,723 Certified Insurance Facilitators (CIFs) across the country.

During the financial year 2022-23, the Company launched 5 new products - SBI Smart Annuity Plus, SBI Life - Retire Smart Plus, SBI Life - Smart Lifetime Saver, SBI Life - Group Micro Shield - SP and SBI Life - Group Micro Shield.

The Company's Gross Written Premium (GWP) grew by 15% y-o-y to Rs 673.16 billion, and the Value of New Business (VoNB) grew by 37% to Rs 50.67 billion. Profit After Tax (PAT) stands at Rs 17.2 billion, with 14% growth over last year. Total investments grew by Rs 395.03 billion from Rs 2,648.32 billion as at March 31, 2022 to Rs 3,043.35 billion as at March 31, 2023. Shareholder's portfolio grew by 11.2%, Non-Linked Policyholder's investment grew by 15.8% and Unit-Linked assets grew by 14.5% as compared to previous year ended March 31, 2022.