#SBILIFE #INSURANCE #IPO #ALLIESFIN
COMPANY OVERVIEW
SBI Life is India’s largest private life insurer, the company was established as a joint venture between SBI and BNP Paribas Cardif in 2001. In terms of new business premium generated in each fiscal year, since fiscal 2010, with a market share of 20.04% of all private life insurers in India, in fiscal 2017. In the last 2 years, their new business premium has grown at a CAGR of 35.45% which is the highest among the top 5 private life insurers. Their Individual Rated Premium market share stands at 20.69% among private life insurers and 11.16% among all life insurers in India. This has increased at a CAGR of 37.90% in the last 2 years. They have issued the highest number of individual policies annually among the top 5 private insurers since fiscal 2014.
In fiscal 2017, their Persistency Ratios were at 81.07% and 67.18%, for 13th month and 61st month respectively, with the 61st month ratios being the highest among the top 5 private life insurers in India. Their Death Claim Settlement Ratio improved from 92.33% to 97.98% in fiscal 2017.
They have a comprehensive product portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs of its diverse customer segments. They are leveraging technology to automate and better ease-of-access to improve customer engagement.
HIGHLIGHTS:
One of the largest private life insurer with a consistent track record of rapid growth.
Significant brand equity and pre-eminent Promoters.
Expansive multi-channel distribution with pan India bancassurance channel and high agent productivity.
Robust financial position supported by high operating efficiencies.
Superior investment performance and Diversified product portfolio with effective risk management.
Strong focus on customer service standards and use of technology.
Objects of the issue:
§ Fees payable to the lead managers and selling commission and processing fees for SCSBs and Registrar to the offer.
§ Selling commission, Brokerage and bidding charges for the Syndicate Members, Registered Brokers, RTAs and CDPs.
§ Printing, Stationery, Advertising and Marketing expenses.
§ Legal and other miscellaneous fees.
OUTLOOK:
The parent company SBI Bank has the widest reach to the customers which helps to attract more customers. The reduced Mis-Selling Ratio, improved Persistency Ratio and Surrender Ratio showcases their dedication to provide superior customer service. At 9.21%, its operating expense ratio is the lowest among top five private insurance players.
Considering the market leadership position of the company and consumer trust on the SBI brand, we believe the company can continue to grow as the insurance sector in India matures. The issue is priced at 1.5 times book value and the P/E Ratio comes to 73x. This makes it slightly expensive as the average P/E for this industry is around 38 and its listed peer is trading around P/E of 36.
TELEGRAM @ALLIESFIN
COMPANY OVERVIEW
SBI Life is India’s largest private life insurer, the company was established as a joint venture between SBI and BNP Paribas Cardif in 2001. In terms of new business premium generated in each fiscal year, since fiscal 2010, with a market share of 20.04% of all private life insurers in India, in fiscal 2017. In the last 2 years, their new business premium has grown at a CAGR of 35.45% which is the highest among the top 5 private life insurers. Their Individual Rated Premium market share stands at 20.69% among private life insurers and 11.16% among all life insurers in India. This has increased at a CAGR of 37.90% in the last 2 years. They have issued the highest number of individual policies annually among the top 5 private insurers since fiscal 2014.
In fiscal 2017, their Persistency Ratios were at 81.07% and 67.18%, for 13th month and 61st month respectively, with the 61st month ratios being the highest among the top 5 private life insurers in India. Their Death Claim Settlement Ratio improved from 92.33% to 97.98% in fiscal 2017.
They have a comprehensive product portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs of its diverse customer segments. They are leveraging technology to automate and better ease-of-access to improve customer engagement.
HIGHLIGHTS:
One of the largest private life insurer with a consistent track record of rapid growth.
Significant brand equity and pre-eminent Promoters.
Expansive multi-channel distribution with pan India bancassurance channel and high agent productivity.
Robust financial position supported by high operating efficiencies.
Superior investment performance and Diversified product portfolio with effective risk management.
Strong focus on customer service standards and use of technology.
Objects of the issue:
§ Fees payable to the lead managers and selling commission and processing fees for SCSBs and Registrar to the offer.
§ Selling commission, Brokerage and bidding charges for the Syndicate Members, Registered Brokers, RTAs and CDPs.
§ Printing, Stationery, Advertising and Marketing expenses.
§ Legal and other miscellaneous fees.
OUTLOOK:
The parent company SBI Bank has the widest reach to the customers which helps to attract more customers. The reduced Mis-Selling Ratio, improved Persistency Ratio and Surrender Ratio showcases their dedication to provide superior customer service. At 9.21%, its operating expense ratio is the lowest among top five private insurance players.
Considering the market leadership position of the company and consumer trust on the SBI brand, we believe the company can continue to grow as the insurance sector in India matures. The issue is priced at 1.5 times book value and the P/E Ratio comes to 73x. This makes it slightly expensive as the average P/E for this industry is around 38 and its listed peer is trading around P/E of 36.
The market is now getting quite competitive in the life insurance space and with ICICI Prudential Life Insurance already listed at a lower valuation and HDFC Standard Life getting listed soon, we believe that fancy on listing may not be there. However, it is good investment for long term.
TELEGRAM @ALLIESFIN
WITH MORE FDI POSSIBLE IN INSURANCE SECTOR, #SBILIFE AT 52 WK TOP