Remarkable round-the-year performance

We continue to be India’s leading private sector life insurance company in terms of individual rated premium and individual new business premium in FY 2019. Our growth surpassed industry average, despite global economic headwinds affecting the Indian economy. Our fundamentals continue to remain strong and we are well positioned to make the most of evolving opportunities.

Your Company’s new business premium reported an impressive 25.8% growth. The individual new business premium grew by 14.6% to ` 96.36 billion in FY 2019. The sharpened focus on our protection business resulted in 174% growth and protection share in new business premium more than doubled from 5.5% in FY 2018 to 11.9% in FY 2019.

We witnessed a sound 33.4% growth vis-à-vis the previous year in renewal premiums, as we collected ` 191.97 billion during FY 2019 from various distribution channels. The gross written premium grew by 30.1% to ` 329.89 billion in FY 2019. This revenue growth was a function of healthy addition of 1.53 million new policies and increasing productivity of both bancassurance and agency channels.

Your Company experienced growth in profitability, too, during the year. Our profit after tax stood at ` 13.27 billion and grew by 15.3% over the preceding year. On effective tax rate basis, our Indian Embedded Value reached ` 237.29 billion, as on March 31, 2019 vis-à-vis ` 201.70 billion, as on March 31, 2018. The Value of New Business (VoNB) grew 21.8% during the year to ` 19.16 billion, and the VoNB margin expanded from 18.4% to 19.8% on effective tax rate basis. In addition to revenue growth, reduction in operating expense ratio from 6.8% in the previous year to 6.4% during the year was another catalyst behind healthy profitability.

A thriving distribution network played a crucial role in driving our performance during the year. SBI Life Insurance Life Mitra’s (Insurance Advisors) and CIFs are well in place to service our growing customer base. During the year, to expand our business and build a large customer base, we further improved our bancassurance channel as well as increased our agents to closely connect with underpenetrated and under-protected market segments. There is a significant scope to expand our reach and we will continue to strengthen our network, going forward. Our expanding footprint will help us acquire more customers and enable us to serve them better.

Your Company’s Assets under Management (AUM) registered 21.3% growth during the financial year to ` 1,410.24 billion vis-à-vis ` 1,162.61 billion reported at the end of the previous financial year. Our 13th month persistency ratio improved from 83.0% in FY 2018 to 85.1% in FY 2019, reflecting better customer retention. Additionally, the mis-selling ratio declined from 0.14% in FY 2018 to 0.10% of the policies sold in FY 2019. Also, we saw reduction in surrender ratio reflecting the fair, transparent and efficient manner in which we acquire new customers and serve the existing ones.

Based on the Company’s profitability, cashflow and financial position, we declared an interim dividend of ` 2 per share at 20% of paid-up equity share capital in FY 2019 amounting to ` 2.41 billion (including dividend distribution tax).

This performance is the result of our sustained efforts to improve the quality of business and customer focus.

Passion drives us

The hard work and commitment of our teams helped us garner many accolades and recognition during the year. We were conferred with the prestigious award of ‘Life Insurer of the Year 2018 - India’ by Insurance Asia News Awards for Excellence 2018, followed by ‘Smart Insurer Award in Life Insurance – Large category’ at the ET Insurance Summit 2018.

We also won the ‘Gold Shield’ for Excellence in Financial Reporting for 2017-18 by ICAI and the ‘Golden Peacock Award for Risk Management’ for 2018. These awards are a testimony to the company’s value-driven commitment towards its customers and stakeholders. We continue to strive for excellence across all spheres.

Diverse initiatives, encouraging outcomes

Enhancing customer focus through digitalisation remained our key focus for FY 2019. We have sought to consistently improve our performance in terms of customer service quality and delivery. We continue to move forward to fulfil your Company’s mission by offering products to cater various customer segments and address different life stage requirements. In FY 2019, we launched two ULIP products namely, Smart Insure Wealth Plus and Saral Insure Wealth Plus. Both these products provide life-coverage, along with disciplined savings and wealth creation over a period of time.

We are expanding our geographic reach to tap into the enormous growth potential in the Indian market by opening new branch offices across the length and breadth of India’s rural and urban geographies. This reinforces our commitment to invest in growing regions, which will support your Company’s overall premium growth.

Your Company is evolving from a mere product provider to a critical partner in need. To provide a strong basis for developing deep, long-term relationship with our customers, we have implemented CRM Next a digital platform for conducting a root-cause analysis of all customer complaints and queries. We aim to enrich the overall customer experience and are working on strategies to save the time and efforts of our customers.

To leverage best-in-class technologies to optimise our sales and after-sales processes, we launched RIA-Chatbot for customer engagement and adopted communication mode through WhatsApp, among others. This has helped us improve the quality of customer service, reduce turn around time for issuance of new policies and help keep a better track of business activity.

Touching and empowering lives

Our credo of ‘Protection of Life’ strongly resonates in our services. We are a socially responsible organisation and have touched the lives of over 2.4 lakh people through our CSR initiatives. During the year, we substantially contributed to improve basic healthcare facilities, quality education and disaster relief. Our drive to educate our customers helped enhance their understanding of insurance products and their benefits. Our constant effort has been to empower our customers to choose the right products and touch their lives in varied ways.

An optimistic roadmap

Our opportunity landscape continues to widen and offers an enormous growth potential. Your Company’s guiding principle is always ‘a long-term perspective’. With the help of positive regulatory initiatives, favourable demographic factors and growing awareness of the need for savings and protection, the insurance industry is likely to prosper in the forthcoming years. Digital transformation is ushering in sweeping societal changes, impacting business models and leading to new and innovative ways of creating value. Digitalisation shows the way forward for us and is expected to benefit the sector immensely in the years to come.

Your Company stands tall at the peak of growth in the life insurance industry. We are confident of continuing to strengthen our market leadership in the future. Our strong and unrivalled distribution network among private insurers allows us to provide a wide range of products in under-served and uninsured market segments. Our pan- India presence due to the banca partnership, coupled with continuous investment in digital and technological platforms will enable us to enhance our Company’s productivity, profitability and outreach.

Customer centricity is at the heart of all our activities and we are swiftly embracing evolving technology trends to meet customer requirements in a timely manner. Innovation remains our key focus area and helps us achieve higher profitability and business excellence. We will also continue to monitor our performance in terms of customer service and satisfaction and raise the bar higher with every passing year.

Before I conclude, I must thank our shareholders and investors for their ongoing trust and confidence. I am grateful to all other stakeholders, including customers, distributors, employees, regulators and the government for their continued support. Our growth was achieved by the sincerity, hard work and dedication of our distributors and employees, which will help us scale higher horizons.

We will continue to remain committed to our pledge to provide protection and encourage our existing and potential customers to wholeheartedly protect responsibilities and multiply happiness.

Best Regards,

Sanjeev Nautiyal
Managing Director and Chief Executive Officer