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India's SBI Life Insurance reported a weaker new business margin for the year ended March 31, hurt by a rising share of low-margin products amid shifting customer preferences.

The value of new business (VNB) - the expected profit from new policies - rose 9.5% to 55.50 billion rupees ($666.1 million). The VNB margin contracted to 28.1% from 30.1% a year earlier.

Life insurers have seen a rise in the share of low-margin unit-linked insurance plans (ULIPs) amid a strong domestic equity market. This has weighed heavily on the insurers' VNB margins, analysts said.

The NSE Nifty 50 Index rose 2.7% in the March quarter, logging its fourth straight quarterly gain and scaling record highs.

SBI Life said its ULIP segment made up 60% of its overall product mix by annualised premium equivalent (APE). The share was 55% a year earlier.

SBI Life's ULIP share is the highest among its peers but the company is able to cushion its margins better with its low-cost structure, analysts have said.

APE, a key metric for insurers, is a gauge of sales that gives the annualised total value of all single premium and recurring premium policies. The company's APE sales rose 17% to 197.20 billion rupees for the year.

SBI Life posted a net premium income growth of 26% to 251.16 billion rupees for the three months ended March 31. Meanwhile, investment income had a more than nine-fold jump to 108.12 billion rupees.

Profit after tax rose 4.4% to 8.11 billion rupees from a year earlier.

Rivals HDFC Life Insurance Co and ICICI Prudential Life Insurance both reported a weaker new business margin on a higher share of ULIPs.

Shares closed 2% lower ahead of the results.

($1 = 83.3200 Indian rupees)