SBI Life Insurance Company Ltd. is one of the leading life insurance companies in India. It is a joint venture between State Bank of India, which is India’s largest public sector bank, and the leading global insurance company BNP Paribas Cardiff. As of March 31, 2019, the company covered as many as 24 million lives.
Industry Overview
With India being the seventh-largest economy in the world and one of the nations with the highest youth population having a median age of 28 years, there is undoubtedly a rise in demand for life insurance. The demand is further propelled by the burgeoning share of the working population, swift urbanization, rising affluence and increased focus on financial inclusion. The Indian life insurance market is the tenth-largest life insurance market worldwide and the fifth largest in Asia with 4.6 trillion in total premium business. Despite this, it continues to be under-penetrated in comparison to countries like Japan, Thailand, and Korea. Moving forward, we can expect an increase in financial savings as a percentage of household savings along with an increase in the share of insurance as a percentage of financial savings to bolster growth in the life insurance space.
Financial Performance
On the standalone financial front, the company reported a growth of 5.56 percent YoY in total income from operations to 386.75 crore in Q1FY20 as against 366.39 crore in Q1FY19. The assets under management (AUMs) stood at 1,46,950 crore in Q1FY20 as compared to 1,41,020 crore in Q1FY19, marking a growth of 4.21 percent. Profit before interest, exceptional items and tax rose to 377.84 crore in Q1FY20 from 363.25 crore in Q1FY19, posting a YoY growth of 4.02 percent. Net profit for the period climbed 4.96 percent YoY to 371.90 crore in Q1FY20 from 354.31 crore in Q1FY19. EPS showcased a growth of 5.08 percent as it soared to 3.72 in Q1FY20 from 3.54 in Q1FY19. The debt-to-equity ratio came in at 77:23. However, 91 percent of its debt investments are in AAA and sovereign instruments.
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