SBI Life Insurance FY26 Results: Navigated Well in a Challenging Year

SBI Life Insurance, one of the most dominant players in India's life insurance industry, delivered a steady FY26 performance despite navigating a genuinely challenging operating environment — marked by GST-related cost headwinds, labour code provisions, regulatory uncertainty around distribution architecture, and volatile equity markets. New business growth was healthy, VNB margins held at the upper end of guidance, and the balance sheet remained robust. Here is our full breakdown.

FY26: Headline Numbers

New business premium (NBP) grew 20% YoY to ₹42,550 crore for FY26, fuelled by strong performance in group savings (₹8,480 crore, +55% YoY), annuity (₹7,030 crore, +34% YoY) and par segment (₹1,670 crore, +123% YoY). Individual savings grew a more moderate 8% YoY to ₹22,420 crore, and ULIPs were up just 2% YoY to ₹16,500 crore. Protection grew to ₹4,620 crore (+13% YoY), with individual protection posting healthy 23% YoY growth.

Annualised Premium Equivalent (APE) came in at ₹24,270 crore, up 13.4% YoY.

Gross written premium increased 19% YoY to ₹1,01,290 crore, aided by 19% growth in renewal premium to ₹58,730 crore — which constituted 58% of GWP, reflecting a healthy in-force book.

VNB grew 12% YoY to ₹6,670 crore with VNB margin at 27.5% — holding at the upper end of the guided 26–28% range despite absorbing GST-related ITC losses. Excluding the GST impact, VNB margin would have been approximately 29%, indicating the underlying margin structure remains strong.

PAT reached ₹2,470 crore, up 2% YoY, with the modest growth reflecting the elevated cost ratio from regulatory and one-time items.

AUM stood at ₹4.87 lakh crore, up 9% YoY, with some moderation in growth due to pressure in equity and debt markets during the year.

Embedded Value grew 15% YoY to ₹80,790 crore, with RoEV at 19.7% — indicating continued strong value creation for shareholders.

Solvency ratio stood at 1.9x, comfortably above the regulatory minimum.

Q4FY26: Quarter Snapshot

NBP for Q4FY26 came in at ₹11,224.9 crore, up 20.4% YoY, with focus maintained on high-margin products including protection. Net premium income for the quarter grew 16% YoY to ₹27,684 crore, supported by PAR and group segment momentum while ULIPs remained broadly flat. Single premium grew 37.4% YoY to ₹6,132.2 crore, driven by strong annuity (+32% YoY) and group savings (+75.8% YoY) volumes.

Q4FY26 PAT stood at ₹804.6 crore, broadly flat YoY (-1.1%), due to higher costs and regulatory headwinds. Operating expenses increased 64% YoY in Q4, driven by GST impact, labour code-related one-time cost, and investment in branches, training, customer service and IT.

AUM moderated to ₹4,87,160 crore in Q4FY26 (down 4.8% QoQ from ₹5,11,710 crore in Q3), reflecting pressure in equity and debt market.

Product Mix and Distribution

The FY26 APE product mix stood as follows: ULIP at 59%, Non-PAR at 18%, Protection at 9%, PAR at 7%, Group at 4% and Annuity at 3%.

A total of 22.2 lakh policies were sold during FY26, covering 22.7 million lives. Individual and group new business sum assured grew 61% and 34% respectively — a strong indicator of deepening protection penetration.

Rider sum assured now accounts for 31% of individual sum assured, reflecting improving rider attachment rates and a greater protection orientation across the book.

Protection remains a key strategic pillar — APE at ₹2,240 crore grew 10% YoY, with individual protection up 24% YoY driven by strong traction in pure protection products.

Distribution: Banca Remains Anchor, Agency Scaling

SBI and RRB bancassurance channels contributed approximately 60% of APE, with individual APE of ₹14,120 crore, up 11% YoY. Management clarified that banca penetration remains strong with no signs of saturation, and the channel continues to be a key growth anchor.

On the regulatory discussion around bank-led open architecture, management stated it has no information beyond what is already publicly available and noted that current RBI draft guidelines do not explicitly mandate open architecture. A gradual 3–4% shift from banca toward agency and emerging channels is expected over time, driven by higher growth in those segments rather than any compression in banca.

Agency channel is a strategic focus area, with APE at ₹6,860 crore, up 15% YoY, supported by the addition of approximately 1.2 lakh agents (gross), the opening of 120 new branches, and improved productivity and training systems. The quality of the agency mix has improved meaningfully — non-ULIP share in agency rose to 39% from 34%, aided by stronger traction in protection and savings, which improves the overall margin profile of this channel.

Other channels (direct, brokers, web aggregators, non-SBI banks) grew approximately 22% YoY and contributed approximately 11% of APE. The online channel delivered particularly strong growth of approximately 48–50% YoY.

Margins: Regulatory Headwinds Absorbed, Structure Intact

VNB margin for FY26 held at 27.5% (vs 27.8% in FY25) — at the upper end of the guided 26–28% range — despite absorbing meaningful headwinds from GST-related ITC losses. Excluding the GST impact, underlying VNB margin would have been approximately 29%.

The margin resilience was driven by an improved product mix (higher protection and non-ULIP share), better customer profile mix and pricing discipline, and operating leverage from growing scale. Management clarified that the expected gradual shift in channel mix from banca toward agency is not anticipated to dilute margins, as higher scale helps absorb the fixed cost base.

Management reiterated a VNB margin guidance of 26–28% going forward, with an internal aspiration of exceeding 27%, balancing growth with profitability. A healthy 19–20% RoEV continues to drive steady compounding of embedded value.

Cost Ratios: One-Time Headwinds, Expected to Stabilise

The opex ratio increased to 6.1% (vs 5.3% in FY25), and the total cost ratio rose to 10.6% (vs 9.7%). This was driven by three factors: GST on commissions, a labour code-related one-time impact, and investments in agency, branches and IT infrastructure.

Importantly, excluding the GST and labour code impacts, underlying opex would have been approximately 5.5%, indicating limited structural cost pressure. Management indicated that most of the cost build-up has already played out and expects cost ratios to remain broadly stable going forward.

Persistency: Broadly Healthy

Persistency trends remained healthy overall. 13th month persistency improved to 87.9% (+53 bps YoY) and 49th month persistency improved to 69.1% (+107 bps YoY). The 61st month persistency declined to 58.1% (vs 61.5% in Q4FY25), which management attributed specifically to COVID-period cohorts lapsing and does not view as a structural concern.

Claims settlement ratio stood at 99.4% and the mis-selling ratio at 0.02% — both among the best metrics in the industry, reflecting the quality of the in-force book.

Regulatory and Accounting Framework

Management continues to monitor the Ind AS transition and the risk-based capital framework, with plans to adopt from FY28 while seeking regulatory forbearance for FY27. This transition timeline is broadly in line with industry peers and is not expected to create any near-term disruption.

Key Financial Estimates (FY25–FY28E)

Metric	FY25	FY26	FY27E	FY28E
New Business Premium (₹ crore)	35,580	42,550	50,116	56,293
APE (₹ crore)	21,420	24,270	28,099	31,949
Total Premium (₹ crore)	84,060	99,956	1,14,116	1,32,111
VNB (₹ crore)	5,836	6,902	7,896	8,978
VNB Margin (%)	27.8	27.5	27.7	27.9
PAT (₹ crore)	2,468	2,470	2,742	3,100
Embedded Value (₹ crore)	69,697	82,373	96,775	1,13,245
RoEV (%)	19.6	18.2	17.5	17.0
AUM (₹ crore)	4,47,467	5,02,152	5,68,820	6,51,098

Management has guided for approximately 13–14% APE growth in FY27, broadly in line with the company's historical CAGR, with focus on annual performance rather than quarterly volatility.

Key Risks

Two risks merit ongoing monitoring. First, an unfavourable change in product mix or slower-than-expected growth — particularly if ULIP dependence re-asserts itself or protection traction moderates. Second, adverse regulation impacting profitability or growth — the ongoing regulatory dialogue around open architecture in bancassurance distribution remains a watch item, though current draft guidelines do not explicitly mandate it.

Frequently Asked Questions (FAQs)

Q1. What was SBI Life's new business premium growth in FY26? New business premium grew 20% YoY to ₹42,550 crore in FY26. Growth was led by group savings (+55% YoY), annuity (+34% YoY) and par segment (+123% YoY), while individual protection delivered healthy 23% YoY growth.

Q2. What was the VNB margin for FY26? VNB margin held at 27.5% in FY26, at the upper end of the guided 26–28% range, despite absorbing GST-related ITC losses. Excluding the GST impact, underlying VNB margin would have been approximately 29%.

Q3. How did SBI Life's embedded value perform in FY26? Embedded Value grew 15% YoY to ₹80,790 crore, with RoEV at 19.7% — reflecting continued strong value creation. On our estimates, EV is expected to grow to approximately ₹96,775 crore in FY27E and ₹1,13,245 crore in FY28E.

Q4. What is the management's growth guidance for FY27? Management has guided for approximately 13–14% APE growth in FY27, in line with the company's historical CAGR. The focus is on a more balanced product mix beyond ULIPs, with improving traction in non-par, par and protection expected to support both growth quality and profitability.

Q5. What is happening with the bancassurance open architecture discussion? Management stated it has no information beyond what is already publicly available and clarified that current RBI draft guidelines do not explicitly mandate open architecture. A gradual 3–4% shift from banca toward agency and emerging channels is expected organically over time, driven by higher growth in those channels rather than any regulatory compulsion.

Q6. Why did the cost ratio increase in FY26? The total cost ratio increased to 10.6% (from 9.7%), driven by GST on commissions, a one-time labour code-related impact, and investments in agency expansion, branch openings and IT. Excluding GST and labour code, underlying opex would have been approximately 5.5%. Management expects cost ratios to remain broadly stable going forward.

Q7. How is the agency channel performing? Agency APE grew 15% YoY to ₹6,860 crore in FY26, supported by the addition of ~1.2 lakh agents (gross), 120 new branch openings, and improved productivity. Notably, the non-ULIP share in agency improved to 39% from 34%, reflecting better product quality in this channel.

Q8. What are the persistency metrics for SBI Life? 13th month persistency improved to 87.9% (+53 bps YoY) and 49th month persistency improved to 69.1% (+107 bps YoY). The 61st month persistency saw some moderation to 58.1%, attributed to COVID-period cohorts, which management does not view as a structural concern. Claims settlement ratio stood at 99.4% and mis-selling ratio at 0.02%.

Q9. What is SBI Life's AUM and solvency position? AUM stood at ₹4.87 lakh crore at the end of FY26, up 9% YoY. Solvency ratio stood at 1.9x, comfortably above the regulatory minimum, indicating a well-capitalised balance sheet.

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