India`s SBI Life posts higher quarterly profit on boost from policy renewals
India's SBI Life Insurance Company reported a 14% rise in first-quarter profit on Thursday, aided by healthy premiums from policy renewals.
The insurer's profit rose to 5.94 billion rupees ($68.8 million) for the quarter ended June 30 from 5.20 billion rupees a year earlier.
The company's shares pared some losses after results to close 0.9% lower.
SBI Life's premium growth was supported by strong policy renewals, while its margins were aided by lower demand for the less profitable market-linked policies amid volatility in the Indian equity markets.
Contribution from protection and non-par policies also drove the value of new business (VNB) and VNB margin higher during the quarter.
VNB, or the expected profit from new policies, rose 12% to 10.9 billion rupees, while VNB margin grew to 27.4%, from 26.8%.
However, premiums from new policies sold, or new business premiums, grew only 3% year-on-year, slower than the previous year's 13% growth.
Analysts said SBI Life has struggled with insurance sales through its parent, State Bank of India, unlike other insurers such as HDFC Life and ICICI Prudential.
($1 = 86.3950 Indian rupees)
