A NOTE FROM THE CHAIRMAN
RIDINGEVERY CHALLENGE
Dear Stakeholders,
At the onset, let me wish all of you and every member of your family the best of health and well-being. We are living through difficult times — a global health crisis of unimaginable scale has taken a huge toll on lives and livelihoods. Even in these unprecedented times, we continue to deliver on our pledge of making available a wide range of products and services in the life insurance and pension segments across all corners of the nation. In our ultimate pursuit of protecting the future of our customers, we have cemented our position as a leader among private life insurers.
We are pleased to report yet another year of robust all-round performance as we remain the leader among private players in terms of individual NBP and IRP. Our performance vis-à-vis the industry is largely attributable to the relentless efforts of our people and various business partners, who have provided seamless support on all fronts. With their unwavering dedication, we are confident of achieving more, together.
In FY20, PAT increased to `14.22 billion from `13.27 billion in FY19 and GWP grew 23.2% y-o-y to `406.35 billion. On an actual tax rate basis, our Indian Embedded Value (IEV) reached `262.91 billion, as on March 31, 2020, from `224.02 billion, as on March 31, 2019. This performance against the backdrop of a slowing economy and intensifying competition speaks volumes about our strong fundamentals.
The global economy has witnessed its weakest growth since the financial crisis of FY09, due to US-China trade tensions and increased protectionism, weak consumption and sluggish business sentiment. The novel coronavirus (COVID-19) outbreak in the fourth quarter of FY20 and the subsequent nationwide lockdown to contain the spread brought major global economies, including India, to a standstill. India recorded its slowest GDP growth in 11 years at 4.2%, down from 6.1% a year earlier.
The varied restrictions on mobility and other non-essential economic activities in light of the pandemic pose a significant challenge for businesses worldwide, which is further aggravated by dampened consumer sentiment and overall aversion to discretionary spending. The Indian government, along with the Reserve Bank of India (RBI), was quick to announce and implement stimulus measures to minimise the impact and put the economy back on track. However, the International Monetary Fund (IMF) and other global institutions expect India’s GDP to contract by at least 4% in FY21, before staging a sharp rebound in FY22.
Although the magnitude of the impact is yet to be ascertained, it is likely to vary across countries and industries. Europe and North America appear to have been the worst affected to date, while Asia has managed it comparatively well in terms of fatalities. China specifically seems to have managed to contain the virus spread, while India continues to witness an increasing number of cases on a daily basis, albeit at low mortality rates. Keeping in view the various measures announced by the central government, we remain positive. However, risks to any forecasts are on the downside, as the pandemic situation is currently fluid.
SBI Life’s successful journey bears testimony to our ability to innovate using technology to cater to our varied pool of customers across every nook and corner of the country.
That said, the crisis has increased awareness about the importance of life and health globally and influenced the way people perceive the importance of protection against life’s uncertainties. The life insurance industry in India has been on an upward trajectory, but given the country’s low insurance penetration, there exists a vast untapped opportunity. We are well equipped to unlock this immense potential, with our comprehensive portfolio, innovative products, unparalleled reach and robust digital platforms.
The current environment has also brought to the fore collective human ingenuity not just to survive through a global crisis but also to thrive by innovating and adapting to the emerging realities. The life insurance industry is one where the need to constantly evolve and learn is imperative. SBI Life’s successful journey bears testimony to our ability to innovate by using technology as a key differentiator in an intensely competitive market.
This technology focus has enabled us to transition to the remote work environment seamlessly with the lockdown announcement and provide uninterrupted services to our customers. In fact, over the years, digitalisation has enabled us to deliver accuracy with speed while optimising costs, thereby contributing to the bottom line. The premium collected from online channel and web aggregators grew 13% y-o-y. Various applications, web-based solutions and Artificial Intelligence (AI) have enabled seamless processes and faster Turnaround Time (TAT), resulting in enriched customer experiences. SBI’s YONO app is one such digital platform where SBI Life has covered more than 1.3 lakh lives. Furthermore, these tools have enabled us to address customer queries efficiently, while helping the organisation understand the customer’s needs and design products and solutions accordingly. Going forward, we will continue to invest in strengthening our digital capabilities to better serve customers and further consolidate our industry leadership.
I take this opportunity to thank all our stakeholders for their commitment, trust and continuous support; our valued customers for entrusting us with their financial security needs and most importantly, the SBI Life team for relentlessly striving to build a future-focused, execution-oriented and value-accretive enterprise.
Warm regards,
Rajnish Kumar
Chairman