Chairman's Message
Dear stakeholders,
The major forces that shaped the world economy in 2022 continued into 2023 with varied intensities. Recovering from the pandemic-induced contraction, global economic growth moderated as escalating geopolitical tensions kept supply chains in disarray and pushed inflation to historically high levels. The central banks of major economies initiated a synchronised and aggressive monetary tightening cycle which has eased inflation in recent months.
Commodity prices that rose sharply have moderated, aided by normalising supply chains. However, increased uncertainty from the recent financial sector turmoil and elevated geopolitical tensions remain key risks. The International Monetary Fund (IMF), in its April 2023 outlook, expects global growth to slow down further to 2.8% in 2023 from 3.4% in 2022 before stabilising to 3.0% in 2024. The Indian economy, on the other hand, demonstrated strong resilience and positioned itself to ascend to the pre-pandemic growth path in FY23. In real terms, the economy is expected to grow at 6.5% in FY24, as per the Economic Survey 2022-23.
The Indian insurance industry has seen impressive growth in the past decade. This growth can be attributed to growing income, increasing awareness and a greater need for safeguarding oneself and one's family post-pandemic. The Indian government has played a very crucial role in increasing the scope of the insurance sector through various policies and schemes, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY,) providing life insurance coverage at an affordable price.
During FY23, the Life Insurance industry recorded 18% growth in New Business Premiums. The life insurance premium is expected to grow at 9% annually in real terms by 2032, making India the fifth-largest life market globally. Today the awareness and demand for Life Insurance products amongst the customer along with digitalisation are supporting the sector’s growth. Further, the regulatory development and vision set for the increasing penetration and sector development are laying the path for long-term and sustainable growth of the Insurance Industry. At SBI Life, we are aligned with the regulator’s vision and will continue to focus on various reforms enabling deeper penetration of the Life Insurer Industry.
It gives me great pride to share with you that SBI Life has been able to maintain its leadership position in the private life insurers space while creating value for customers and other stakeholders. With great delight, I place before you, the highlights of SBI Life’s performance in FY23. With our widespread distribution network and a wide range of products and services, your Company has emerged as one of the most trusted life insurance companies in India. With a customer-first approach, your Company has focused on profitable growth. Your Company’s GWP grew by 15% y-o-y to ₹673.16 billion, and the Value of New Business (VoNB) grew by 37% to ₹50.67 billion. Profit After Tax (PAT) stands at ₹17.2 billion, with 14% growth over last year. Indian Embedded Value (IEV) stood at ₹460.44 billion. The steady and persistent growth enabled your Company to surpass the ₹3 trillion mark in AUM. The solvency position is strong and stands at 215%. Your Company has declared and paid an Interim Dividend of ₹2.5 per share during this financial year.
Your Company has adopted smarter ways of onboarding partners, identifying prospective customers and faster system integration. Your Company is constantly automating processes with the help of robotic process automation and AI bots to improve efficiency and deliver faster and more personalised customer service. The scope of IoT in the Indian insurance market continues to go beyond telematics and customer risk assessment. Further, your Company’s emphasis on technological initiatives across the channel's value chain has resulted in improved business performance. Your Company has partnered with various technology companies to expand its digital reach and coverage. These partnerships are expected to provide a major boost to the Company’s business and help increase insurance penetration, which will play a crucial role in the overall development of the country.
SBI Life is deeply committed to empowering the communities around its business operations. Your Company’s overarching goal is to create a sustainable and inclusive environment where everyone can thrive. We have taken a holistic approach to development, focusing on society and sustainability. To safeguard the environment and society in the process of development, your Company has integrated business operations with the ESG framework. Aligned with these objectives, your Company is providing insurance solutions to the unorganised sector and implementing diverse CSR initiatives. Your Company has spent ₹226.21 million across social impact initiatives in FY23.
SBI Life has adapted to the “Business Responsibility and Sustainability Report (BRSR)” framework in accordance with the directives issued by the Securities and Exchange Board of India (SEBI) in this regard.
The outlook for India’s life insurance industry is promising, driven by a growing middle class, a large young insurable population and an increasing awareness of the need for protection and retirement planning. Further, the insurance regulator has been playing a proactive role in amending the regulatory framework to drive changes in the way the industry conducts its business and engages with its customers. This, along with various government initiatives to bring more and more people under the safety net, bodes well for the long-term prospects of the Indian insurance industry.
I conclude by thanking the regulators, our customers, employees and shareholders for their continued support and belief in SBI Life. Your Company will continue its efforts to operate with synergy and strengthen the economic value created for all the stakeholders.
Best wishes,
Dinesh Kumar Khara
Chairman
