Summary
SBI Life Insurance Company Ltd. - Q3 FY 2026 Earnings Call Summary Wednesday, January 28, 2026, 4:00 PM IST
Event Participants
Executives 6 Abhijit Gulanikar (President, Business Strategy), Amit Jhingran (MD & CEO), Prithesh Chaubey (President & Appointed Actuary), Sangramjit Sarangi (President & CFO), Smita Verma (SVP, Finance & IR), Subhendu Bal (President & CRO)
Analysts 8 Avinash Singh (Emkay Global), Dipanjan Ghosh (Citi), Harshal Mehta (AMSEC), Madhukar Lada (JPMorgan), Megha Bagaria (BNP Paribas), Mohit Mangal (Centrum), Prayesh Jain (Motilal Oswal), Rishi Jhunjhunwala (IIFL), Sanketh Godha (Avendus Spark), Shobhit Sharma (HDFC Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| New Business Premium (NBP) | ₹31,330 crores | +19% YoY; Private market share stands at 23.5%. |
| Individual Rated Premium (IRP) | ₹16,680 crores | +15% YoY; Outperformed industry average 3-year CAGR of 10.4% with 14.4%. |
| Gross Written Premium (GWP) | ₹73,350 crores | +20% YoY; Driven by strong renewal premium growth. |
| Annualized Premium Equivalent (APE) | ₹18,520 crores | +16% YoY; Individual APE contributed ₹16,880 crores (+15% YoY). |
| Renewal Premium | ₹42,020 crores | +21% YoY; Accounts for 57% of total GWP. |
| Value of New Business (VNB) | ₹5,040 crores | +17% YoY; Q3 VNB alone reached ₹2,290 crores (+22% YoY). |
| VNB Margin | 27.2% | +34 bps YoY; Margin includes GST impact; excluding GST, margin would be 28.3%. |
| Assets Under Management (AUM) | ₹5.12 lakh crores | +16% YoY; Milestone achievement crossing ₹5 trillion mark. |
| Profit After Tax (PAT) | ₹167 crores | +4% YoY; Impacted by GST and labor law provisions (₹135 crores). |
| Indian Embedded Value (IEV) | ₹80,130 crores | +18% YoY; Calculated after accounting for new labor law impacts. |
| 13th Month Persistency | 87.1% | +101 bps YoY; Improvement noted despite slight declines in later cohorts. |
| Solvency Ratio | 1.91 | Decrease from H1 due to high sum-assured growth; remains well above 1.50 regulatory floor. |
| Operating Expense Ratio | 6.2% | +90 bps YoY; Rise attributed to product mix shifts and regulatory changes. |
Geographic & Segment Commentary
- Bancassurance: Contributes 62% of total APE, led by SBI and RRBs. Individual APE grew 16% to ₹11,230 crores, with SBI branch productivity rising 15% to ₹64 lakh per branch.
- Agency Channel: Grew 11% to an individual APE of ₹4,880 crores. The company added 94,000 agents on a gross basis this year, with a shift in product mix toward non-ULIP products (31% to 37%).
- Protection Segment: Recorded 24% YoY growth on an APE basis (₹1,660 crores). Individual pure protection saw a significant 98% APE growth, while Individual Protection APE grew 21% to ₹640 crores.
- Digital & Online: Online channel APE grew by 45% for the 9-month period. 99.7% of individual proposals are submitted digitally, with 58% processed via automated underwriting.
Company-Specific & Strategic Commentary
- GST Exemption Impact: Management noted that GST exemption on individual policies improved affordability and demand in Q3, helping the company lead the private segment with a 68 bps market share gain.
- Product Innovation: Launched “Smart Money Back Plus” (Participating) garnering ₹560 crores in premium; “Smart Platina Advantage” (Non-Par) is seeing strong traction due to 30-year guarantees.
- Rider Strategy: Rider sum-assured now contributes 30% of individual sum-assured. Management is now enabling rider attachment at policy anniversaries for existing open-for-sale products to drive margins.
- Labor Law Provisioning: A one-time impact of ₹135 crores was recognized in Q3 due to revised labor codes, affecting PAT growth rate.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| APE Growth | 13% - 14% for FY26 | Management maintains guidance with a positive bias; expectations for Q4 remain steady despite a strong Q3. |
| VNB Margin | 26.0% - 28.0% | Internal efficiencies and product mix expected to offset most of the 150-175 bps GST impact. |
| Product Mix | 15% - 20% Par Share | Target share for Participating products to provide better customer returns and diversify from ULIPs. |
| Deferred Annuity | Launch in FY27 | Working on regular-pay/limited-pay deferred annuity products to meet market demand. |
Risks & Constraints
| Risk | Context |
|---|---|
| GST Impact on Margins | The 18% GST on commissions (noted as ~150 bps annualized impact) remains a structural cost. Management is using product mix and OPEX leverage to mitigate this, but net impact remains 30-40 bps lower than FY25. |
| Persistency in Older Cohorts | 61st-month persistency has declined. Management attributes this to the “COVID cohort” and expects this to be the final quarter of significant pressure from that period. |
| Solvency Compression | Solvency fell to 1.91 due to high sum-assured growth (74% individual growth). While comfortable, further rapid expansion in high-capital products or high dividends could pressure this ratio. |
Q&A Highlights
Growth and Guidance
- Question: Is the 13-14% APE guidance for the full year too conservative given 16% growth in 9M? (Sanketh Godha)
- Answer: Q3 is historically the biggest quarter in absolute terms. While we expect to beat 10-11% growth in Q4, we prefer to maintain the 14% guidance for the full year at this stage (Amit Jhingran).
Margin Drivers & GST
- Question: How will margins evolve after the GST impact? (Avinash Singh)
- Answer: The annualized GST impact is ~150 bps. We expect to offset most of this through product mix, leaving a net impact of only 30-40 bps by year-end. We stick to our 26-28% range (Prithesh Chaubey).
Protection Mix
- Question: Why is there a divergence between 74% sum-assured growth and 25% protection premium growth? (Vinod Rajamani)
- Answer: The mix is shifting from Return of Premium (TROP) to Pure Protection. Pure protection has lower premiums for the same sum-assured, causing premium growth to lag volume growth (Amit Jhingran).
Agency and Costs
- Question: The OPEX ratio increased by 90 bps; is this due to agency expansion? (Vinod Rajamani)
- Answer: The increase is due to GST, labor codes, and product mix. Agency productivity remains healthy at ₹3 lakh per agent despite adding 94,000 new agents (Amit Jhingran).
Key Takeaway
SBI Life delivered a steady Q3 FY26, characterized by a milestone AUM of ₹5.12 lakh crores and 19% NBP growth. Despite structural headwinds from the 18% GST on commissions and a ₹135 crore labor law provision, the company maintained VNB margins at 27.2% through a favorable shift toward high-margin protection and participating products. The individual pure protection segment grew at an exceptional 98%, while the Bancassurance channel showed renewed momentum with 16% growth. Management remains committed to an FY26 APE growth guidance of 13-14% and a VNB margin range of 26-28%, banking on its status as a low-cost operator and its ability to leverage its 58,000+ CIFs. Looking ahead, the launch of regular-pay deferred annuity products and continued digital scale-up via YONO (1.5 lakh policies sold YTD) are expected to sustain market leadership.
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