Sbi Life Insurance Co. Ltd. · NSE:SBILIFE
Sbi Life Insurance — Investor Presentation (June 2018)
39 slides from Sbi Life Insurance's investor presentation, June 2018
Slide 1: Investor Presentation – FY19
Investor Presentation – FY19
Slide 2: Agenda
Agenda I Performance update II Strategy and initiatives III Industry overview IV Annexure 2
Slide 3: Performance snapshot
Performance snapshot Consistent growth across all parameters ` in billion Growth FY17 FY 18 FY19 3Yr CAGR Rate New Business Premium 101.4 109.7 137.9 26% 25% New Business APE 67.3 85.4 97.0 14% 24% Scale and Individual Rated Premium 59.4 77.9 89.5 15% 28% Growth Renewal Premium 108.7 143.9 192.0 33%
Slide 4: Premium and market share
Premium and market share Continued growth in new business premium backed by strong growth in Renewal Premium ` in billion GWP 158.3 210.2 253.5 329.9 30% • Share of regular premium in Individual NBP is 92% • 15% growth in individual regular 192.0 33% premium 143.9 108.7 • Share of renewal premium in
Slide 5: Product portfolio
Product portfolio Diversified product portfolio – Increase in share of protection business NBP Individual NBP Protection 9% 5% 5% 12% 3% 1% 1% 4% 45% 51% 53% 56% 64% 79% 73% 76% 34% 6% 39% 26% 34% 3% 6% 29% 4% 21% 19% 17% 24% 18% 11% 13% FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Par Non Par Ul
Slide 6: Distribution strength
Distribution strength Multi Channel Distribution reach and efficiency IRP ` in billion NBP 71.1 101.4 109.7 137.9 42.8 59.4 77.9 89.5 1% 1% 1% 1% 18% 12% 15% 25% 50% 34% 31% 30% 38% 9% 25% 21% 27% 22% 7% 65% 68% 70% 62% 64% 29% 61% 18% 54% 53% FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Banca Ag
Slide 7: Cost efficiency and profitability
Cost efficiency and profitability Low cost ratios and growing profitability ` in billion Cost ratios1 Profit after Tax Net worth 9.2% 3 Yr CAGR – 16% 3 Yr CAGR – 17% 7.8% 6.8% 6.4% 4.5% 4.4% 4.1% 3.7% 13.27 11.50 75.8 9.55 8.61 65.3 55.5 47.3 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY
Slide 8: Components of Indian Embedded Value (IEV)
Components of Indian Embedded Value (IEV) ` in billion Embedded Value Operating Profit (EVOP): ` 33.2 billion Operating Return on Embedded Value: 17.4% Value of Inforce (VIF) Business 7.8 224.0 150.2 0.9 3.2 85.7 ANW PVFP TVFOG FCoC CRNHR IEV 1. The rate of income tax applied to the surplus is set a
Slide 9: Analysis of movement in IEV
Analysis of movement in IEV ` in billion EV grown by 21% CAGR from FY16 - FY19 16.2 0.8 2.5 224.0 17.2 190.7 (1.0) (2.4) Opening EV VoNB Unwinding Operating Change in Economic Dividend Paid Closing EV Experience Operating Assumption Variance Assumptions Change & Variance Growth of 12% in EV Operatin
Slide 10: Components of Value of New Business (VoNB)
Components of Value of New Business (VoNB) ` in billion Robust VoNB growth of 24% from ` 13.9 billion to ` 17.2 billion 21.1 (0.2) (0.9) 17.2 (2.8) VoNB Before CoC TVFOG FCRC CRNHR VoNB After CoC VoNB Margin increases to 17.7% 10 Components may not add up to total due to rounding-off
Slide 11: Customer retention and satisfaction
Customer retention and satisfaction Customer retention through quality underwriting 85.1% Persistency1 80.7% 81.1% 83.0% 76.7% 76.9% 73.2% 73.9% 75.2% 69.2% 67.4% 70.0% 71.4% 66.4% 67.2% 62.5% 63.9% 58.4% 57.2% 53.8% 13th Month 25th Month 37th Month 49th Month 61st Month FY 16 FY 17 FY 18 FY 19 Cust
Slide 12: Asset under Management
Asset under Management Growing Assets under Management ` in billion AuM – Linked | Non Linked 798.3 977.4 1,162.6 1,410.2 Growth of 21% in AUM 93:7 55% 90:10 54% 89:11 53% 89:11 51% 90% of the debt investments are in AAA and Sovereign instrument 58:42 45% 61:39 46% 65:35 47% 64:36 49% Debt Equity Ra
Slide 13: Agenda
Agenda I Performance update II Strategy and initiatives III Industry overview IV Annexure 13
Slide 14: Growth Drivers
Growth Drivers Structural Parameters Under- Increase in Affluent Protection Rising Driving penetration of Class with rise in Gap Healthcare Digitisation Life Insurance Savings Spending Competitive Strengths Geographical Embedded cost Customer First Digital Enhanced Spread discipline Approach Transfo
Slide 15: Achievements in Target Areas
Achievements in Target Areas • 184,452 trained insurance • 908 offices spread throughout • Maintain cost leadership – professionals Decrease in Opex ratio to 6.4% • 64% of renewal premium collection through digital mode • 44% increase in policies • Individual New Business Sum through Web Aggregators
Slide 16: Tapping Profitable Opportunities
Tapping Profitable Opportunities 174% 16% 176% Growth in Protection Share of Protection Growth in Individual NBP in Individual NOP Protection NOP Agency Bancassurance Corporate Agents, Online • Growth in Individual protection • Individual protection NBP has • Growth in Individual protection NBP by 1
Slide 17: Digital Initiatives – Transforming customer experience
Digital Initiatives – Transforming customer experience Customer Service 4 lac+ queries resolved New Business through chatbot 1 lac+ unique users Employees engagement and 295+ Crore renewal Social Media Activities premium collected Advisors equipped with digital tools allow through app them to de
Slide 18: Agenda
Agenda I Performance update II Strategy and initiatives III Industry overview IV Annexure 18
Slide 19: India Life Insurance - Structural Growth Drivers in Place
India Life Insurance - Structural Growth Drivers in Place Strong Demographic Tailwinds Supporting India Growth Story World GDP Data1 (in USD trillion) Composition of Population2 Share of urban population3 19.4 7% 8% 10% 13% 40.1% 34.9% 31% 34% 30.9% 37% 27.7% 40% 12.2 28% 28% 26% 24% 4.9 3.7 2.6 2.6
Slide 20: Life Insurance – Significant Under Penetration versus other Markets
Life Insurance – Significant Under Penetration versus other Markets Share of Life Insurance in Savings expected to Rise Underpenetrated Insurance Market1 Premium as % of GDP – 2017 Protection margin highest amongst peers • 10th largest life insurance market 11.0% worldwide and 5th largest in Asia 92
Slide 21: Life insurance Industry evolution in India
Life insurance Industry evolution in India Trajectory of Life Insurance Sector in India New business performance - industry and private players Revival Phase ` billion Private: 19% CAGR High Growth Phase Growth Stagnation Industry: 20% CAGR 1,938 Private: 19% CAGR Private: -3% CAGR 1,750 Industry:14
Slide 22: Product portfolio and Channel mix
Product portfolio and Channel mix Industry Composition – Product mix and Channel mix Product portfolio1 Industry Private Players 13% 12% 13% 13% 43% 42% 44% 38% 87% 88% 87% 87% 57% 58% 56% 62% FY 2016 FY 2017 FY 2018 9M FY 19 FY 2016 FY 2017 FY 2018 9M FY 19 Traditional ULIP Traditional ULIP Higher
Slide 23: Agenda
Agenda I Performance update II Strategy and initiatives III Industry overview IV Annexure 23
Slide 24: Annualised Premium Equivalent (APE)
Annualised Premium Equivalent (APE) APE Product mix and Channel mix Product portfolio ` in billion Y-o-Y Mix Segment FY16 FY17 FY18 FY 19 Growth (FY 19) Individual Savings 43.1 59.4 78.5 87.2 11% 90% - Par 15.5 11.2 20.9 18.1 (13%) 19% - Non Par 0.6 0.5 0.7 0.4 (40%) 0% - ULIP 26.9 47.7 56.9 68.6 21
Slide 25: Individual Annualised Premium Equivalent (APE)
Individual Annualised Premium Equivalent (APE) Individual APE – Channel Mix Segment wise ` in billion Y-o-Y Mix Channel Segment FY17 FY18 FY 19 Growth (FY 19) Participating 5.3 13.2 9.9 (25%) 11% Non Participating 1.0 0.9 3.5 267% 4% Bancassurance Unit Linked 32.4 38.9 49.0 26% 54% Total 38.7 53.0 6
Slide 26: Customer Age and Policy Term
Customer Age and Policy Term1 Customer Profile Average customer age in years Average policy term in years Par 37 Par 12 Protection 37 Protection 14 ULIP 43 ULIP 11 Non Par - Others 41 Non Par - Others 23 Overall 40 Overall 12 26 1. Age and term for individual products for FY 19
Slide 27: Persistency – Regular Premium
Persistency – Regular Premium Quality Underwriting and Customer Retention Persistency1 83.90% 81.27% 74.25% 70.82% 64.46% 66.42% 59.09% 60.34% 45.33% 47.46% 13th month 25th month 37th month 49th month 61st month FY 18 FY 19 1. The persistency ratios are calculated as per IRDAI circular dated 23rd Ja
Slide 28: Analysis of movement in IEV
Analysis of movement in IEV ` in billion IEV Movement Analysis - Components FY 19 Opening IEV 190.70 Expected return on existing business At Reference Rate 11.74 At expected real-world return in excess of reference rate 4.47 Operating Assumptions Change (1.01) VoNB added during the period 17.19 Oper
Slide 29: Sensitivity Analysis
Sensitivity Analysis Scenario Change in EV% Change in VoNB% Reference Rate +100 bps (5%) 3% Reference Rate -100 bps 5% (3%) Decrease in Equity Value 10% (1%) - Proportionate change in lapse rate +10% (1%) (6%) Proportionate change in lapse rate -10% 1% 6% Mortality / Morbidity +10% (2%) (7%) Mortali
Slide 30: Corporate Social Responsibility
Corporate Social Responsibility Fulfilling our responsibility towards Society Literacy programs Primary Education Healthcare for for women and women and children children SBI L i fe’s CSR fo cu s areas Rural development Environment Healthcare Skill development Disaster relief 142 projects undertaken
Slide 31: Awards
Awards Won the ‘RIMS India Enterprise Awarded 'Life Insurer of the Year Winner of the Gold Shield Award RISK Management (ERM) Award 2018 – India' by Insurance Asia for Excellence in Financial Reporting of Distinction 2018’, by the Risk & News Awards for Excellence 2018 at ICAI Awards for Excellence
Slide 32: Revenue and Profit & Loss A/c
Revenue and Profit & Loss A/c ` in billion Particulars FY 18 FY 19 Premium earned 253.5 329.9 Premium on reinsurance ceded (1.9) (1.0) Net premium earned 251.6 328.9 Investment income1 89.0 116.0 Other income 0.8 0.8 Total income (A) 341.4 445.7 Commission paid 11.2 13.5 Operating and other expenses
Slide 33: Balance Sheet
Balance Sheet ` in billion Particulars FY18 FY 19 SOURCES OF FUNDS Share Capital 10.0 10.0 Reserves and Surplus 53.7 64.6 Credit/(Debit) Fair Value Change Account 1.5 1.2 Sub-Total 65.3 75.8 Credit/(Debit) Fair Value Change Account 9.4 10.6 Policy Liabilities 555.6 649.5 Provision for Linked Liabili
Slide 34: IEV Methodology and Approach (1/2)
IEV Methodology and Approach (1/2) Embedded Value is a measure of the consolidated value of shareholders’ interest in the covered life insurance business. The embedded value has been determined by following a market consistent methodology, as per the requirements and principles set forth by the IAI
Slide 35: IEV Methodology and Approach (2/2)
IEV Methodology and Approach (2/2) Components of Value of Inforce (VIF) business: Present Value of Future Profits (PVFP): PVFP represents the present value of future post taxation shareholder cash-flows projected to emerge from the in-force covered business and the assets backing liabilities of the
Slide 36: Abbreviations
Abbreviations Term Description Term Description GWP Gross Written Premium Opex Operating Expenses (excluding commission) NBP New Business Premium CAGR Compounded Annual Growth Rate NOP Number of Policies GDP Gross Domestic Product APE Annualized Premium Equivalent CIF Certified Insurance Facilitator
Slide 37: Glossary
Glossary New Business APE: The sum of annualized first year premiums on regular premium policies, and 10.00% of single premiums, written by the Company during the fiscal year from both retail and group customers New Business Premium (NBP): Insurance premium that is due in the first policy year o
Slide 38: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements'. These fo
Slide 39: Thank you
Thank you Investor Relations Contact: SBI Life Insurance Co Ltd Fifth Floor, Natraj, M V Road & Western Expressway Highway , Andheri (E), Mumbai Dial - +91 22 6191 0281/ 0399 Email – investorrelations@sbilife.co.in Website – www.sbilife.co.in 39
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