SBI Life Insurance reported a 7 per cent fall in second-quarter profit. The insurer’s profits were hurt by higher operating expenses and commissions paid to boost sales amid intensifying competition in the sector.
The insurer’s net profit fell to Rs 495 crore for the quarter ended in September from Rs 529 crore a year earlier.
Insurance demand has remained strong in India, bolstered by rising financial awareness. However, competition has also increased, resulting in insurers paying higher commissions to agents to drive sales.
SBI Life’s expenses, which include operating costs and commissions paid, rose 28 per cent to Rs 2,759 crore.
SBI Life Insurance’s net premium income jumped 22.6 per cent to Rs 24,848 crore, driven by a near 20 per cent rise in premiums from old policies that were renewed.
Rising costs outweighed gains from policy renewals and weighed on the company’s profit.