SBI Life Company analysis

Industry Profile  :  Basic concept of Insurance is offsetting the Risk. Insurance is basically contract which is readable. There are some types of insurance contracts which if you return to Insurance company, you will receive money against it. But basically insurance is contract which is help you to offset the risk.
As per Swiss Re Institute sigma No 3/2017 report, in 2016, global life premiums are estimated to have increased 2.5%; premium growth declined in the advanced markets by 50 bps, but accelerated in the emerging markets. Life premiums in the emerging markets grew 17% in 2016 versus 12% in 2015, well above the overall growth of 2.5%. In terms of the market share of life insurance, Asia is the largest continent, accounting for 38% of premium collected. India’s share is just ~2.4% in the global life insurance market as of 2016, indicating the vast potential for growth in India’s life insurance industry. In the global insurance industry, around 55% of premium comes from life insurance and the rest from the non – life segment; in emerging markets, around 54% of premium comes from life insurance. By contrast, the share of life insurance is over 78% for India.
The financial inclusion initiative from govt, increased use of technology, availability of 4G technology, Financialization of Savings are playing key role in sector. For private players, the share of bancassurance in new business premium has been growing steadily over the past few years. which is also one large force.

Company Profile : The company was established in 2001 as joint venture in Between State Bank of India and BNP Paribas. Even though the promoter of the company is public sector company, The company is Private life insurance company. The Company is India’s leading private life insurer, in terms of New Business Premium generated in each fiscal year. All due to Its Promoter, and distribution channel, between Fiscal 2015 and Fiscal 2017, New Business Premium generated increased at a CAGR of 35.45%, which is the highest among the top five private life insurers (in terms of total premium in Fiscal 2017) in India. Company’s market share of Individual Rated Premium of 20.69% among private life insurers in India and 11.16% of the entire life insurance industry in India.

The company is having Product portfolio of 37 individual and group products, including a range of protection and savings products ( ULIP). Little More than 50% of companies business is generated from ULIPs. Participting products generated 10.775 business in New Business Premium. Group fund management another large part, around 31%.

Shareholding Pattern  :  State bank of India, India’s Biggest lender holds 62.10%. BNP Paribas Cardif Holds 22% as promoter. Mutual Funds holds 3.27%. Financial institutions or banks hold 0.18% other than promoter holding. 4.35% held by Foreign Investors. 8.1% held by General Public.

Financials and ratios  : 

 2012 - 132013 - 142014 - 152015 - 162016 - 17
Premium Received10,413.21910,783.43812,867.11015,825.36421,015.135
Reinsurance Paid67.91981.49887.110159.914162.682
Net Premium 10345.310701.941278015665.4520852.453
Income from Investment4,373.956,353.99810,242.9143,340.9149,294.984
Total Income14,975.52517,369.42223,186.48619,119.72430,277.513
Net benefits Paid7,778.7838,780.2028,197.6857,958.5519,526.142
Commission 509.985557.613603.713714.258783.342
Operating Expenses1,000.1531,089.4331,167.5251,480.8521,646.489
Expense ratio14.5%15.27%13.76%13.87%11.56%
Loss ratio74.70%81.42%63.71%50.28%45.32%
Combined ratio89.20%96.69%77.47%64.16%56.89%
Investment Income Ratio42.%58.92%79.60%21.11%44.22%
Net Profit630.112727.753814.867844.103954.653
EPS6.307.288.158.449.55
ROE25.66%23.89%21.99%19.21%18.56%
FLOTs764.315835.266714.594651.953654.594
Solvency Ratio216%223%217%212%204%
NAV27.3633.5640.5647.3355.52

Future Prospectus  :  As the large part of new business is ULIP, This company is Insurance company cum Asset management company. This is showing mentality of Indian public. ” Insurance Is investment.” But bancassurance network of the company is very strong. Fundamentals are very strong. more important is the insurance business is growing in India due to financialisation of savings. so the potential of future growth is big.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter