Amit Jhingaran, MD and CEO, SBI Life Insurance, speaks to Athira Warrior about his strategy to reduce reliance on ULIPs and grow in the current fiscal. Excerpts…
Why did premium income growth remain stable in FY25?
The company has registered a growth of around 13 per cent based on individual APE (equivalent to annual premium). The total APE has remained stable as the contribution from the group fund has been low. We deliberately did not work in this direction because the rates offered by the industry were negative for our margins. In the coming years, too, we will register a growth of 14 per cent based on individual APE, and the growth based on total APE will be around 12 to 13 per cent.
In FY25, our goal was to shift the product mix towards non-ULIP products based on the assessment of the financial needs of customers. The impact of our efforts was visible in the last quarter. ULIP share fell to well below 60 percent in the fourth quarter. This was supported by the strong growth of our traditional products. We introduced 4 new products in the traditional segment. Increasing focus on traditional products and volatility in the stock market have played a major role in reducing the share of ULIP in total sales.
The company has achieved the VNB margin target. How will your margins be in FY26?
VNB margin in the fourth quarter of FY25 was 30.5 percent. This is very good and diversification of products has improved the situation. Overall, it ended the financial year at 27.8 percent, which is in line with our guidelines. In the coming financial year (FY26), we have set a target of around 27-28 percent.
Why has the share of the bancassurance channel in the distribution mix declined?
Traditionally, the company’s banca channel has been strong. We have a lot of opportunities to improve our reach and we will continue to work on that. But we are also seeing a lot of opportunities through the agency channel.
How do you see the growth in the banking channel with the focus on agency?
The company has a 29% share in the banking channel in the overall industry. Banca channel growth in FY25 was 9%, and the 3-year CAGR is 10 to 12%. We are targeting low double-digit growth in the banca channel next year.
The share of traditional products increased in the last quarter. How do you see the product mix going forward?
The ideal product mix depends on the areas in which the company is strong and how it meets the needs of the customers. ULIP has had a high share in our company. To diversify the product mix, we made efforts to increase the share of other segments. We are confident that the product mix will continue to change in FY 2026 and we will be able to maintain the share of ULIP at 65 percent and the share of traditional products at 35 percent.