Dear Shareholders,

We had begun our journey with a mission to offer a diverse spectrum of life insurance and pension products at competitive premiums, ensuring high standards of customer satisfaction and world-class operating efficiency. It is deeply gratifying to note that we have come a long way since then and our continued growth and brand recall, over the years, validates our enduring commitment to our core values of trustworthiness, ambition, innovation, dynamism and excellence.

These values are intangibles that underpin and catalyse our Company’s sustainable performance. Now coming back to the reporting year, I am delighted to present to you the highlights of your Company’s performance during FY 2019.

Your Company has posted a record PAT of ` 13.27 billion for FY 2019 – an increase of 15.3% over the last financial year. The Company has maintained its leading position amongst private players in terms of Individual rated premium and has garnered total Gross written premium of ` 329.89 billion, registering a growth of 30.1%. On effective tax rate basis, the Company's Indian Embedded Value reached ` 237.29 billion, as on March 31, 2019 vis-à-vis ` 201.70 billion, as on March 31, 2018. Your Company continues to strive for sustainable growth across all parameters with the help of its extensive distribution capabilities, financial strength & prudence and customer-first approach. Despite challenges and rising competition, your Company has performed well vis-à-vis the industry.

This performance is the outcome of the support and encouragement that we continue to receive from our growing fraternity of stakeholders. I am deeply grateful to all stakeholders for their contribution. Our stakeholders represent a solid foundation for us to prosper and achieve the next level of business growth and value creation.

The macro picture globally is not wholly favourable for fast-paced growth. The global economy had to grapple with multiple headwinds and experienced 3.6% growth in 2018. Both developed and emerging markets witnessed sluggish growth. The protectionist policies by the US, uncertainty over Brexit and tepid GDP growth in other advanced economies including Eurozone, Japan, the UK and Canada accentuated the slowdown. Considering the downside risks, major advanced economies are likely to grow slowly over the next few years, while the emerging markets are likely to take the lead.

Looking ahead, global economic growth is expected to decelerate to around 3% in 2019. Having said that, volatility in oil prices, escalation of the US-China tensions disputes represent key risks to global growth. However, it must be emphasised that this current phase of global slowdown offers a great opportunity for economies to boost human capital and increase opportunities for investments and promote trade integration.

Emerging Asia continues to outperform other regions, with economies of India and China both set to remain above the 6% growth threshold both in 2019 and 2020. The emerging economies are expected to account for 60% of global growth in the next decade. In India, the rise in growth is likely to continue against the backdrop of favourable demographics, consistent economic reforms undertaken by the Government of India, massive impetus on infrastructure creation, accommodative monetary policies by the Reserve Bank of India (RBI), the enhanced ease of doing business and rapid digitalisation. India has moved up 23 places to 77 in World Bank – Ease of Doing Business ranking. Structural changes such as Insolvency and Bankruptcy Code (IBC) and stabilisation of Goods and Services Tax (GST) are also likely to drive economic activity.

The outlook for insurance markets in emerging economies remains largely positive, even as cyclical and structural factors weigh on the overall macro growth prospects. The country’s life insurance industry continues to grow rapidly with the rising awareness among people for financial protection and saving opportunities based on higher personal disposable income. The country’s low protection penetration vis-à-vis advanced geographies and financialisation of household savings present opportunities for insurers. Also, India has a higher protection gap than many other economies. Hence, the demand for protection products is on the rise. The market share of private sector insurance companies continues to head north and SBI Life remains at the vanguard of the life insurance industry in India.

We are living in an era of continuous and rapid disruption driven by data analytics and digital technologies; and this trend touches all industries and businesses, including our own.

The primary enabler of future profitability in insurance and the overall industry growth will be technology and data. Information, once digitalised, is being used to improve processes across the insurance value chain, including underwriting and pricing decisions, and outreach to customers. The increasing use of technology in insurance provides greater ease to customers; and your Company is actively using and making improvements to its digital platforms to provide better experience to customers.

Your Company is scaling up automation and the use of artificial intelligence in core operations. The use of chatbot to resolve customer queries, digital tools to advise customers and offering products & services through SBI’s YONO app are few of the digital initiatives that deserve mention. These initiatives help enrich customer experience, garner critical data to map customer behavioural and buying patterns and accelerates decision-making. To enable a seamless process for our customers, we invest in tools and platforms that enhance the knowledge of our employees.

India’s life insurance sector still remains largely untapped, providing a huge headroom for growth. We must, however, need to continuously innovate to cater to customer aspirations. The successful execution will be driven by our focus on digital technology, maintaining our financial discipline, increasing distribution partners and our customer-first approach.

Before, I conclude I must thank all our stakeholders for their continued faith in our strength and capabilities, our customers for their valuable support and trust and our teams for their tireless efforts to build a future-focused, execution-oriented and value-accretive enterprise.

Warm Regards,

Rajnish Kumar
Chairman