Robust growth in renewal premium collections helped SBI Life, the country’s second-largest private life insurer, report a net profit of Rs 366 crore for the financial year ended March 31. This was 32.6 per cent more than the net profit of Rs 276 crore reported in the previous financial year.
“During 2010-11, the new business premium collection increased by 7 per cent to Rs 7,252 crore. This was supplemented by the 74 per cent growth in renewal premium collections at Rs 5,340 crore,” said M N Rao, managing director and chief executive officer.
The company’s persistency level improved to 69 per cent during the year from 58 per cent in the previous year, while its solvency ratio stood at 2.06. The Insurance Regulatory and Development Authority (Irda) stipulates a minimum solvency margin of 1.5 for insurance companies
SBI life is a joint venture between India’s largest lender, State Bank of India (SBI) and France-based BNP Paribas Assurance. SBI holds a stake of 74 per cent in the company, while the remaining stake is held by the French insurer.
“Given the changes in the regulations, we expect new business premiums in the industry to grow by around 15 per cent during 2011-12. In SBI Life, we expect to grow new business premiums by 35 per cent, which should translate into a bottom line growth of 10-15 per cent,” Rao told Business Standard.
The company’s assets under management rose 40 per cent to Rs 40,163 crore and the total cumulative investment in equities stood at Rs 25,000 crore, Rao said.
However, sales during 2010-11 took a hit after new norms were introduced by Irda in September 2010, with most of the growth in premium income taking place during the first six months of the financial year. Private insurers, which posted a marginal 2.55 per cent rise in new premium collections at Rs 39,381, were the worst hit. The life insurance industry collected Rs 1,25,826 through the sale of new policies in 2010-11, a growth of 15 per cent over the previous year.
