ICICI Securities
SBI Life Insurance (Buy)
Target: ₹1,000
CMP: ₹774.40
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.
Premium growth was strong at 27.2 per cent y-o-y to ₹12,858 crore, led by higher traction in renewal (up 28 per cent y-o-y) and single NBP (up 71 per cent). Growth in renewal premium continued to remain healthy at nearly 28.1 per cent to ₹7,150 crore. New business premium (NBP) growth was healthy at 27.4 per cent to ₹5,940 crore, led by strong accretion in protection & group premium. Among NBP, traction in individual business was muted at ₹2,680 crore vs. ₹2,850 crore in Q2-FY20, primarily led by decline in premium in ULIP (down 3.5 per cent) and non-par products (down 7.5 per cent).
However, protection business reported strong growth at ₹620 crore in Q2-FY21, up 26.5 per cent. Proportion of total protection NBP to total NBP was at approximately 10.4 per cent in Q2-FY21. Group savings products reported strong growth at ₹2,650 crore, up 100.8 per cent.
We continue to prefer businesses with long term growth potential and lower balance sheet, we remain structurally positive on the stock.