SBI Life Insurance will continue to leverage over 27,000 SBI and regional rural bank branches through the bancassurance channel, even as it strengthens other channels. MD & CEO Amit Jhingran tells Narayanan V about the company’s multi-channel distribution strategy, growth outlook for FY27, and demand for ULIPs amid volatile market conditions. Edited excerpts:
SBI Life’s net profit was almost flat at ₹2,470 crore in FY26.
We provided a Value of New Business (VoNB) guidance of 26%-28% at the start of the previous financial year. We are happy that we were able to meet our guidance with 27.5% growth in FY26. It was achieved despite major events like Goods and Services Tax exemption, which had a major dent on profitability due to non-availability of input tax credit (ITC).
A major part of the dent caused by the ITC (loss) has been taken care by improving the product mix and cost optimisation in many operational areas. It helped us meet the full year guidance.
What’s the impact of ITC loss?
The first half (of FY26) was relatively slow, but the numbers in the third and fourth quarter were pretty encouraging. Post-GST rate cut, we have also seen good growth in individual protection policies. ITC has not impacted our top line but actually helped in achieving better top line growth. It has impacted our bottom line because it is now a direct cost to the company.
We have been able to meet that to a large extent. The ITC impact came only after September. In the first six months, there might be some effect of ITC on the profitability if you compare year-on-year numbers for first and second quarter, however we are confident to manage this impact, as we have done in the last financial year.
Your growth guidance for FY27?
We are projecting 13-14% growth in IRP (Individual Rated Premium) growth. Our Annualised Premium Equivalent (APE) will also grow in the same range. On the VoNB front, we continue to maintain the range that we have been working in the last couple of years, that is 26%-28%.
Bancassurance contributes over 60% of your sales. How do you plan to diversify your distribution?
Bancassurance has been a very strong channel for us. Even if you look at the industry figures, Banca growth has been higher than the other channels. The number of touch points that are available through the Banca channel is much larger. So, it will continue to play a very important role. We will continue to explore all opportunities that are available through our very strong parent partner, State Bank of India.
At the same time, we are also identifying opportunities that are available on the agency side. For the last three years, we have been strengthening our agency channel, opening more branches, employing more agents, and providing them better training tools. These have resulted in a good growth coming through the agency channel also. We are strengthening our digital channel also. We have a two-pronged digital strategy.
One is our direct digital channel and the other is SBI’s digital channel, which is the Yono platform. We have been able to serve more than 221,000 lives on the Yono channel in the last one year, and we will continue to introduce more products on this channel. We look at the costs involved in various channels, and wherever we see opportunity, we like to grow higher compared to other channels.
SBI Life is heavily dependent on ULIPs. How is the segment impacted due to market volatality?
In the current scenario, if you look at the short term return in the financial products like ULIPs or mutual funds, the returns may not look attractive. The customer must understand that these are longer-term products, and if they stick with their policies for the period of the policy they have chosen, the returns are going to be in line with what has been shown to them in benefit illustration.
Having said that, we are also working on product diversification. In FY25, our ULIP contribution was around 70%. We closed FY26 with 66% of ULIPs. In the current financial year, we are taking a target of bringing it down to 63%. The sale of all other lines of businesses including protection, non-par savings and guaranteed products, and the participating products are seeing better growth rates.
Regulators have been flagging the industry’s high distribution cost. Are you prepared for any regulations on commission?
SBI Life is the lowest operating expenses (Opex) company in the entire insurance industry. We are the best placed to meet any kind of commission regulation that will be coming in from the regulator. We welcome any move on the commission front. Let the regulator put out the draft paper. We will submit our responses based on that.