Q1FY22 Result Analysis:
The net profit for Q1FY22 reduced YoY by 43% to Rs.220 Cr due to higher claim pay-outs. The number of claims in Q1FY22 stood at 8956.
Conference call Highlights:
• The average ticket size for ULIPs is Rs.100,000, while it was Rs.50,000-60,000 for non-par products. Moving forward, the ticket size for non-par products may come down, but margins will remain protected, if not increase.
• The company is focusing in non-par products by the year-end. The non-par product mix was 9% in FY21, which decreased to 7% in Q1FY22 as the demand for ULIPs increased. However, the company is confident of increasing the non-par product mix to double digits in FY22 and it has already reduced the price of a few non-par products to increase pace.
• The company is planning to provide insurance through all the branches. currently, only 80% of branches offer insurance products. The overall focus is on increase the penetration of insurance in SBI’s large customer base.
• The company maintains an edge against the industry on account of the ticket size, spread across geography, and good investment yield.
• Nearly 55% of the total premium was generated from Tier-I cities.
• Growth from new Banca tie-ups such as UCO, South Indian Bank, and YES Bank is showing robust trends.
• 51,000 individual protection policies were issued through the YONO app. The new business premium of Rs.300 mn was through the YONO channel in FY21.
• Protection growth across distribution channels was strong, with 55% YoY growth seen in banca, 57% YoY in agency, and 73% YoY growth in other distribution channels.
• Annuity breakup: Individual Annuity was INR2.24b, while Group Annuity was INR4.25b on an NBP basis.
• The company has maintained strong pricing across product segments.
• The company has achieved private market leadership in individual rated premium of Rs 1,390 Cr private market share of 18.9% in Q1FY22
Claims & Reserves:
• The company holds additional reserves of Rs.4.4 bn toward Covid-19 compared to Rs.1.83bn in 4QFY21
• The company has received 28,000 death claims in Q1FY22, with gross claims of Rs.15.76bn and claims net of reinsurance of Rs.13.15bn.
• For Q1FY22, gross Covid claims stood at Rs7.32bn, while net of reinsurance claims stood at Rs5.7bn.
• The company has already increased its mortality assumptions in Mar’21. Therefore, the provisioning made during the quarter was in check. Also, it does not expect any change in the mortality assumptions for FY22.