SBI Life Crosses ₹5 Trillion AUM, PAT Rises 4% Amidst GST Costs

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AuthorKavya Nair|Published at:
SBI Life Crosses ₹5 Trillion AUM, PAT Rises 4% Amidst GST Costs
Overview

SBI Life Insurance reported strong Q3 FY2025-26 results, crossing ₹5 trillion in Assets Under Management (AUM) with 16% YoY growth. Gross Written Premium (GWP) surged 20% YoY to INR 733.5 billion, and Value of New Business (VNB) grew 17% to INR 50.4 billion with margins at 27.2%. Profit After Tax (PAT) saw a modest 4% YoY increase to INR 16.7 billion, though management highlighted that PAT would have grown 34% without GST and labour law impacts.

📉 The Financial Deep Dive

SBI Life Insurance Company Limited posted robust growth in its Q3 FY2025-26 results, highlighted by its Assets Under Management (AUM) crossing the significant INR 5 trillion mark, an impressive 16% year-on-year (YoY) increase. This milestone underscores sustained customer trust and effective asset management.

The Numbers:

  • Gross Written Premium (GWP): INR 733.5 billion, a strong 20% YoY growth.
  • Individual-rated Premium (IRP): INR 166.8 billion, up 15% YoY.
  • Total New Business Premium (NBP): INR 313.3 billion, marking a 19% YoY increase.
  • Profit After Tax (PAT): INR 16.7 billion, a 4% YoY growth. However, management clarified that excluding the impact of GST and revised labour laws, PAT would have registered a substantial 34% growth YoY.
  • Value of New Business (VNB): Increased by 17% YoY to INR 50.4 billion.
  • VNB Margin: Stood at 27.2%, showing an improvement of 34 basis points YoY, even after accounting for GST impacts.
  • Indian Embedded Value (IEV): Grew 18% YoY to INR 801.3 billion as of December 31, 2025.
  • Solvency Ratio: Remained healthy at 1.91, well above the regulatory minimum of 1.50.

The Quality & Discussion:
While the reported PAT shows a muted 4% growth, the underlying performance, when adjusted for one-off impacts from GST and revised labour laws, reveals a much stronger trajectory with a potential 34% growth. This highlights the significant, albeit temporary, drag on reported profits. The VNB margin expansion of 34 bps is a positive sign of improving profitability on new business, especially considering the adverse GST effect.

The company reaffirmed its full-year APE (Annualised Premium Equivalent) growth guidance of 13-14% and maintained its VNB margin guidance of 26-28%. Management expressed confidence, citing strong momentum.

Key growth drivers identified by management include:

  • Improving overall industry momentum.
  • Customer preference shift towards protection-oriented products.
  • Affordability boost from GST exemption on individual policies.
  • Strategic strengthening of distribution channels, including the opening of 66 new branches and robust growth (45% APE) in the online channel.

The protection segment showed a 24% YoY growth on an APE basis, indicating successful product strategy. While persistency in some older cohorts saw a slight dip, overall renewal premium growth was strong at 21% YoY.

Risks & Outlook:
Cost ratios, including OPEX and Total Cost Ratios, increased due to GST and labour law impacts. Management expects these to stabilize around current levels, but this warrants investor attention. The company's preparedness for potential regulatory changes concerning commission capping was also noted, indicating proactive risk management.

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