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India's SBI Life Insurance Company reported a nearly 40% year-on-year rise in second-quarter profit on Wednesday, helped by higher investment income and sustained demand for insurance products.

SBI Life said its profit rose to 5.29 billion rupees ($62.92 million) for the quarter ended Sept. 30, from 3.8 billion rupees a year earlier.

Net premium income rose 1% to 202.66 billion rupees, while investment income more than doubled to 197.53 billion rupees.

SBI Life's annualised premium equivalent (APE) sales, a key metric that gives annualised total value of all single premium and recurring premium policies, rose 9% to 90.3 billion rupees for the half-year ended Sept. 30.

The insurer's value of new business (VNB), or expected profit from new policies, rose 2% to 24.2 billion rupees for the half-year.

A strong equity market has boosted demand for market- or unit-linked insurance plans (ULIPs) in recent quarters.

ULIPs accounted for 63% of SBI Life's overall product mix for April-September, up from 56% a year earlier.

This resulted in the contraction of VNB margins for SBI Life to 26.8% for the half-year from 28.6% a year ago.

Peers HDFC Life and ICICI Prudential also reported a drop in VNB margins for the half-year.

Shares of SBI Life were up around 1% after the results.

($1 = 84.0725 Indian rupees)