SBI LIFE INSURANCE CO LTD (NSE: SBILIFE) Q3 2025 Earnings Call dated Jan. 17, 2025
Corporate Participants:
Amit Jhingran — Managing Director and Chief Executive Officer
Unidentified Speaker
Sangramjit Sarangi — President & Chief Financial Officer
Prithesh Chaubey — Appointed Actuary
Analysts:
Avinash Singh — Analyst
Shreya Shivani — Analyst
Supratim Datta — Analyst
Prayesh Jain — Analyst
Dipanjan Ghosh — Analyst
Sanketh Godha — Analyst
Rishi Jhunjhunwala — Analyst
Raghvesh — Analyst
Neeraj Toshniwal — Analyst
Gaurav Jain — Analyst
Madhukar Ladha — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to SBI Life Insurance Company Limited Q3 FY ’25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Amit Jhingran, MD and CEO, SBI Life Insurance. Thank you. And over to you, Mr. Jhingran.
Amit Jhingran — Managing Director and Chief Executive Officer
Good evening, everyone.
We are happy to welcome you all to the results update call of SBI Life Insurance for the period ended December 31, 2024. We appreciate and thank you wholeheartedly for your time and efforts attending our earnings call. Update on our financial results can be assessed on our website, as well as on the websites of both the stock exchanges. Along with me, Sangramjit Singh Sarangi, President and CFO; Abhijit Gulanikar, President, Business Strategy; Subhendu Bal, Chief Actuary and Chief Risk Officer; Prithesh Chaubey, Appointed Actuary; and Smita Verma, Senior Vice President, Finance and Investor Relations, are present.
As we reflect on our results for this quarter, we would like to begin by acknowledging that Q3 2023 was an exceptionally strong period, setting a very high benchmark for us. Despite the high base from last year’s Q3, we are pleased to report that company has continued to perform well. Not only did we manage to sustain our momentum, but we also achieved growth. During the quarter, December month’s New Business Premium was one of the highest ever collection for the company. This speaks volumes about our team’s resilience, adaptability and commitment to delivering strong results, regardless of the high benchmark we set last year.
I’m pleased to share that we have seen progress in several key areas as compared to previous corresponding periods, demonstrating the strength and dedication of our teamwork. We are building a strong base by improving the agency and banca productivity levels. By leveraging customer insights and industry trends, we have created solutions that provide enhanced coverage, greater flexibility and more tailored options ensuring that we continue to deliver exceptional value.
I’m delighted to share that as per our ongoing commitment to meet the evolving needs of our customers, during the month of December, we have successfully added one more product in our Platina series, that is Smart Platina Supreme, a non-par guaranteed savings product, which provides a stable guaranteed income stream, ensuring financial security and it is for any life stage. The initial response has been encouraging, and the company collected more than INR2.5 billion of premium under this product within a span of 20 days. Moving forward, we remain committed to continuously assessing and refining our offerings, ensuring that we are well equipped to meet dynamic demands of our customers. We recognize that staying attuned to customer preferences and market trends is essential for our continued success.
Now, let me give you some key highlights for the period ended 31 December, 2024. New Business Premium stands at INR262.6 billion and maintained private market leadership with a share of 22.4%. Individual New Business Premium stands at INR198.6 billion, with a growth of 12% and private market share of 27.8%. For Q3 FY ’25, the company’s individual New Business Premium grew by 10% as compared to industry growth of 6%. Gross written premium stands at INR609.8 billion, with a growth of 9%. Protection New Business Premium stands at INR27.9 billion.
Profit after tax stands at INR16 billion, with a strong growth of 48% over corresponding period last year. Value of new business stands at INR42.9 billion. VoNB margin stands at 26.9% for the period ended December 31, 2024. Embedded value of the company as on December 31, 2024 stands at INR681.4 billion, registering a growth of 17% over March 31, 2024. Our asset under management stand at INR4.42 trillion, with a growth of 19% over corresponding period last year. Solvency ratio of 2.04 as against the regulatory requirement of 1.50.
We will now update you on each of the key parameters in detail. Let me start with the premium. Individual New Business Premium has grown to INR198.6 billion, with a growth of 12% over last period. The company’s private market share stands at 27.8%, and industry market share stands at 17.4%. For the quarter three FY ’25, the company’s individual new business grew by 10% as compared to industry growth of 6%.
On individual rated new business, we stand at INR145.5 billion, with a growth of 14% over last period and maintaining our leadership position with private market share of 25.3% and total market share of 17.8%. The company’s three-year CAGR of IRP, that is individual rated new business premium, stands at 17%, outpacing the industry CAGR of 13%. This is on backdrop of consistent growth in performance, which company delivered year-on-year.
We have witnessed some headwinds in group business, particularly with our group savings products. Group New Business Premium stands at INR64 billion, with contribution of 24% in New Business Premium. Having said that, we have collected total New Business Premium of INR262.6 billion. The company’s private market share stands at 22.4% and total market share stands at 9.5%. The company’s five-year CAGR of New Business Premium stands at 15%, outpacing the industry CAGR of 7%. Renewal premium grew by 15% to INR347.3 billion, which accounts for 57% of the gross written premium.
To sum up, gross return premium stands at INR609.8 billion, with a growth of 9% over corresponding previous period. In terms of APE, premium stands at INR159.7 billion, registering a growth of 11%. Out of this, individual APE stands at INR147.3 billion, with a growth of 14%. During the period ended December 31, 2024, a total of 15.88 lakh new policies were issued, that is 1.58 million. Number of lives covered during the period ended December 31, 2024 is 18.4 million.
The growth in sum assured serves as a positive indicator of consumer confidence and the increasing awareness of the importance of financial protection. This upward trend reflects a shifting mindset among individuals who recognize the need for comprehensive coverage to safeguard their future. Individual new business sum assured registered a growth of 33% over corresponding previous period. And for the quarter, growth was at 46%.
Let me give you detail about the product mix. As on December ’24, our guaranteed non-par saving products are contributing 18% on individual APE basis. Individual ULIP new business is at INR127.4 billion, with a growth of 25% over corresponding last period and constitutes 64% of individual new business. The growth in ULIP can be attributed to the movement in equity markets. The trend is evident across the industry as more customers seek products that blend investment opportunities with protection.
Individual protection new business is at INR5.2 billion. Individual protection business for Q3 FY ’25 has grown by 12% on NBP basis as compared to Q2 FY ’25. Group protection new business stands at INR22.7 billion. Credit life new business has grown by 8% and stands at INR17.3 billion. Protection business contributes 8% of APE and stands at INR13.5 billion. Retirement plans assist customers in building a substantial corpus of funds to maintain the desired lifestyle and manage expenses in their golden years. Total annuity and pension new business underwritten by the company is INR53.1 billion.
Moving to update on distribution partners. With strength of more than 57,000 CIFs, SBI and regional rural banks, bancassurance business contributes a share of 63% on total APE basis. And on individual APE basis, it stands at INR97.2 billion with growth of 8%. SBI branch productivity on individual APE terms stands at INR5.5 million for the period and registered a growth of 9%.
As mentioned in our last quarter’s call, the digital channel within SBI Bank, relationship is garnering good numbers of customers. And during the quarter, it attracted more than 50,000 customers opting for protection policies through self-initiated journey. With enhanced focus on agency channel and strategic launch of Agency 2.0, we have witnessed impressive strides in agent activation, agency channel productivity, onboarding of new agents and better collaboration between agents.
Our agent productivity for the period stands at INR2.9 lakhs on individual NBP terms, registering a growth of 27% over corresponding previous period. Agency registered new business growth of 36% over corresponding previous period and contributes 26%. Agency channel individual APE showed a growth of 31% over last period and stands at INR44 billion. As on December 31, 2024, the total number of agents stand at 2,41,251. During the period ended December ’24, the company added more than 75,000 agents on gross basis.
As part of our strategic initiative to strengthen our presence across the country, we have opened 46 new branches this year. By the end of the financial year, we plan to add an additional 40 branches. The expansion is aligned with our vision to create infrastructure that supports the long-term development of our agency channel. Our expansion targets are carefully designed to cater not only to Tier-1 and Tier-2 cities, but also to underserved Tier-3 and Tier-4 regions. All these steps have resulted in increase in the share of agency channel in individual rated premium from 26% in previous period to 30% in current period.
During the period ended December 31, 2024, other channels, that is direct corporate agents, brokers, online and web aggregators grew by 26% in terms of individual New Business Premium. Linked business through other channels registered growth of 53% on APE basis. We are investing in building our online business channel. Individual rated premium through this channel has grown by 71% for the current period as compared to previous period of last year. And protection business through this channel on IRP terms grew by 23% as compared to previous period last year.
Coming to updates on profitability, the company’s profit after tax for the period ended December 31, 2024 stands at INR16 billion, with a robust growth of 48% as compared to previous corresponding period. Our solvency remained strong at 2.04 as against regulatory requirement of 1.50. Value of new business stands at INR42.9 billion, with a growth of 6%. VoNB margin stands at 26.9% for the period ended December 2024. The shift in VoNB is mainly on account of increase in share of ULIP business as compared to previous period. Embedded value for the company as on December 31, 2024 stands at INR681.4 billion, registering a growth of 17% over March 30, ‘2124 — 2024, sorry.
Coming to operational efficiencies, our opex ratio stands at 5.3% and the total cost ratio stands at 10.2% for the period ended December 31, 2024. With respect to persistency of individual regular premium, 13th-month persistency stands at 86.10, an improvement of 83 basis points and 61st month persistency stands at 63.29%, an improvement of 521 basis points. As mentioned in my opening remarks, asset under management stands at INR4.42 trillion as at December 31, 2024, having growth of 19%.
Death claim settlement ratio stands at 99.3%. The company has registered an improvement of 44 basis points over last period. Our mis-selling ratio stands at just 0.03%, which is one of the lowest in the industry and this is achieved through our consistent approach adopted to ensure right selling to the customers. Digitalization is transforming the life insurance industry, enabling us to deliver enhanced services and a more seamless experience for our customers. As we embrace this digital transformation, we remain committed to innovation and excellence, ensuring that we stay ahead in an increasingly competitive landscape. The company continues efficient usage of technology for simplification of processes, with 99% of the individual proposals being submitted digitally. 50% of the individual proposals are processed through automated underwriting.
To conclude, by fostering a culture of resilience and continuous improvement, supported by a clear focus of developing agency channel along with the partner bank network, we are confidently positioned for the future. Our commitment to exceptional customer service strengthens client relationships and reinforces our status as a trusted leader in the market. With a focus on long term, sustainable and profitable growth, we aim to create lasting values for our customers, shareholders and communities, paving the way for a prosperous future together.
Thank you, all. And now we are happy to take any questions that you may have.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question comes from the line of Avinash Singh with Emkay Global. Please go ahead.
Avinash Singh
Yeah. Thanks for the opportunity. Good set of numbers, particularly considering the backdrop. A few questions. The first one would be more that now, I mean, of course, we have crossed the nine month, so there should be more clarity around what’s happening with your main channel bank, SBI Bank and also how agency is performing, so if — and also the impact of surrender regulation. Of course, it is known in reported numbers. So if you can just sort of provide your guidance regarding growth and margin for the full-year FY ’25. And related to that, if you can just try to quantify, if at all there was some impact from this product refiling under new surrender regulations. That’s the question number one.
Second would be agency. Of course, the addition and deletion are kind of a pretty regular. But if I see, particularly this quarter, somehow agency deletion seems to have picked up, I mean, nearly 50,000 odd. So, addition is like a 25,000 per quarter that has been happening for last three quarters, but deletion has certainly picked up in Q3. So, what is going on there with the agency? If you can just sort of provide more color.
And lastly one more. Protection side, again, I see that individual protection, the decline has kind of nearly arrested, more or less quarter has been flat Y-o-Y basis. And if we understand the pickup in the product like that Smart fees, premier and that product targeted by customer is good, but still the premium growth for individual protection is not kind of still coming into positive. If you can just help understand if there is a significant change in regular protection vis-a-vis a return of premium product on a year-on-year basis? Thank you.
Amit Jhingran
First of all, thanks for congratulating on our numbers. Your first question about the growth banca and agency, so you would have noticed that our growth for the first nine months is in line with the kind of guidance that we had at the end of second quarter, the first half year when we said that we will be growing somewhere around 15%. And on IRP basis, that growth is more or less there. On both the channels, agency as well as banca, the growth is more or less is in line with the targets that we had taken for the year. And banca channel grew by almost 10% in first nine months, whereas agency channel is growing by almost 29% to 30% in the first nine year — first nine months. For the remaining period also, we expect the growth to be in the same range. And overall basis, we continue to stick to our guideline of 15% on IRP basis.
Your second question was regarding the number of agents addition, as you said is around 75,000, but net addition is less because the deletion for the period is a little higher. The basic reason behind that is that the company has changed the definition of active agents. And now with the stricter enforcement of the activation guideline, we have deleted a large number of agents who were not active as per company’s definition during the quarter. So, that number is approximately 40,000 to 45,000 during this quarter.
So going on, this was a one-time exercise and going on, we will continue to stick to this definition only. So going forward, the net addition numbers will be better. Coming to protection, we have seen a shift towards pure protection products as compared to the return of premium policies. Now, 63% policies are in the protection segment. That means, I mean, 63% policies are with the return of premium, whereas the pure protection has increased to 37% and that is being reflected in our product portfolio now.
Avinash Singh
Thank you. And if you can just sort of provide some color on any impact from this surrender regulation changes on the margin? Because I mean, in the margin, of course, I mean that part might be included somewhere in the operating income and changes or something. So if you can just help understand if there was any impact from the surrender regulation changes?
Amit Jhingran
Yes. So, all our products have been relaunched with the new guideline of first year surrender. But one quarter is a very, very short period to have any kind of experience and any kind of margin impact on overall company basis. We will see that how this surrender in the first year pans out and how it affects our margins.
Unidentified Speaker
Just to also add that, what we have mentioned earlier as well that our impact, even potential impact is bare minimum. We don’t see much impact coming on account of the surrender value.
Avinash Singh
Okay. Thank you. All the best.
Operator
Thank you. Next question comes to the line of Shreya Shivani with CLSA. Please go ahead.
Shreya Shivani
Yeah. Thank you for the opportunity. My first question is on the individual protection. So, we had mentioned in the last quarterly call that we’ve launched the three-click product on YONO, and that should see better growth in the quarter to come. So while there is a good quarter-on-quarter pickup, but I wanted to understand is it far more difficult to scale up a product just on YONO app? Or is this product also available in other channels? Wanted to understand some color around this product and whether the margins of this product are higher or weaker than our earlier versions of individual protection products that we had.
Second is just an update on the banca channel. There were quite a bit of noise around the mis-selling or the concentration risk, etc., on this channel. And we’d also noticed that the regulator has set up a task force on the banca channel in October 2023. So if you can give us any update of what came out of it? What — any commentary that any interactions that you’ve had and how should we look at this channel? I understand you’ve given us a good guidance that it should pick up, but from the regulator’s point of view and the different task force that had been set up around it, what’s going on, if you can help us with that. Thanks.
Amit Jhingran
So first, talking about the individual protection product on the YONO platform that we were talking, which we informed last analyst call and which you were referring to. So this product, we are happy to say that contrary to your perception that it is difficult to sell, in the last four months, we have been able to sell more than 70,000 policies of this product. Almost 73,000 as on date. So, one thing that we have noticed here that and in the earlier question I responded also that in this particular product. we are seeing a good growth in pure protection policies in place of the return of premium policies that has improved our sum assured. Of course, the ticket size in pure protection is much lesser than the return of premium product. So it is not reflecting on the total premium side, but the number of policies. And overall, we are happy the way this product is faring.
Talking of banca channel, you are right that there is a lot of noise in the market. But as on date, we have not heard anything from the regulator on this particular subject. And I would like to emphasize that IRDA always had a consultative kind of approach on every subject. Whatever they have done, they have done after floating a paper taking, circulating draft guidelines, taking industry view and then only they have decided on anything. On banca channel, we have not received any consultation paper or any task force that you were talking about. We have not heard about that. So it is all around in the market, but nothing concrete as on date from either the regulator or from the ministry side.
Shreya Shivani
So the task force, actually, there was a document on the IRDAI website. I know it’s old. It’s back in October 2023. And there were other life insurers who had said they are the representatives who are going to be a part of the task force. I saw that SBI Life was not mentioned there. So, I mean, it seems a little confusing, right, because it’s not just that in the media they have said. A year before they started speaking in media. They had also put out this document on their own website. So, then it adds to the fire unfortunately. I mean, it adds to the confusion unfortunately. That’s why these questions are coming up.
Amit Jhingran
So, I mean, in the recent past we have not heard anything on this subject from the regulator and that is what we stand by as on date. Having said that, whatever guidelines will come in, we will definitely go along with those guidelines. And we — as you must have noticed, we are also focusing on our agency channel to take care of any contingency. But as on date, there is no such thing in the discussion stage.
Shreya Shivani
Got it, sir. Thank you very much. This answers my question.
Operator
Thank you. Next question comes on the line of Supratim Datta with Ambit. Please go ahead.
Supratim Datta
Hi. Thanks for the opportunity. My question is on the agency side. I understand you have laid out certain plans that you want to do this year. But if I have to take a five-year view, by when do you think agency can go up to around 50% contribution to the overall APE? And what all building blocks we would need to put in place for agency to contribute 50%? If you could give us some color on that. And then in that, what would be the banca growth, then we’ll have to build in? If you could give us some color on that, that would be very helpful. That would be my first question.
Then on the banca growth, when do we think the banca growth will ramp up and get closer to the overall APE growth that we are delivering? Currently, it’s still in the single digit. So by when do we think that, that gets up to the double-digit figure that we used to do one year back? And what again — what all will be the drivers of that, if you could give us some color on that?
And lastly coming, to the product, new products, you launched a new product on the non-par side recently. If you could give us some color, how that has tracked in December, if you could give them? And how do you see that play out over the remainder of the year? And two, given, ULIPs has been a key driver of growth and we are entering a cycle where the overall equity market growth might be muted, in that scenario, what would be the key products that we would be focusing on to drive growth? If you could give us some color on that, that also would be very helpful. Thank you.
Amit Jhingran
So if you look at our distribution mix, the overall banca contribution is much higher than the agency. And if you are talking about 50% agency share, then obviously agency growth will be higher than banca growth. So, we cannot have a situation where banca growth is in line with the overall APE growth and agency share is also growing, that itself becomes contradictory. We have identified a lot of opportunities on the agency side, and we want to take advantage of that. And that is why we are strengthening our agency channel by opening more number of branches, employing more agents, increasing agent productivity and all. And that is already getting reflected in our first nine months’ number.
Going forward also, we will keep on adding more branches and more agents and have a higher agency growth. Banca growth at 10%, I will say, with the kind of base that we have is pretty satisfactory. And with the very strong partner bank with us, we will continue to explore all kind of opportunities. And as I already informed in the last analyst call also, that in addition to the CIF network, we are also developing the alternate digital channel on the banca side. And as I already informed, with one product and more than 70,000 policies in the first year, we are pretty confident that this channel will also start contributing in a bigger way in coming times. So, we stand by our overall growth forecast in the medium term of 15% to 17% and with the kind of growth in the banca channel, let’s say, 10% and agency channel at 30% plus.
Unidentified Speaker
Talking of —
Amit Jhingran
Will you like to take that product par thing? Yeah, Sangram?
Sangramjit Sarangi
Product, we have launched in this quarter that is Smart Platina, which is on the non-par side and which has done very well. And we expect that this momentum will continue into this quarter, but yes, subject to the kind of rate of interest, which is expected to come by from the RBI. But at this moment, it is going as per expectation and we expect that it will continue the same momentum in this fourth quarter of FY ’25. As far as ULIPs, you have mentioned about the market going down and it will have some impact. The last three months, the market correction has happened, but we have not seen any kind of connection between the market going down and the ULIP business going down because similarly, if you have seen already in the SIPs where mutual funds have been increasing month-on-month, the last three months consistently. And we don’t see any kind of challenge for the ULIP per se because the experience and the past — the number shows that whenever the market is getting corrected, ULIP doesn’t get any much impact per se. And that is the right opportune time for the customers to invest because you get a lower NAV and subsequently, at the time of five-year to seven-year horizon, you get a better opportunity for a good return. So, we don’t see any challenge for us as far as ULIP is concerned.
Supratim Datta
Got it. Sangramjit, if you could tell us what is the APE of the Smart Platina in December, if you could give us some color on that, that would be helpful?
Sangramjit Sarangi
INR250 crores is the number. I think it is there in our opening remarks.
Amit Jhingran
Approximately INR250 crores in the month of December.
Sangramjit Sarangi
Yes, sir.
Supratim Datta
Got it. Okay. Thank you.
Operator
Thank you. Next question comes to the line of Prayesh Jain with Motilal Oswal Financial Services Ltd. Please go ahead.
Prayesh Jain
Yeah. Hi. A good set of numbers. Just, sir, sort of one question is on the SBI channel. We saw, I think, a decent growth coming back in this quarter. What different did we do in this particular quarter as compared to the first half where we had seen some slowdown? Extending that question, the YONO sales — the sales on YONO app, do they classify under SBI Bank itself? And what about the other group companies of SBI like SBI Securities or any other companies that kind of sell the — sell the — sell products of SBI Life? Would they be — where would they be classified in as? This would be my first question.
Amit Jhingran
So, YONO product does get classified under the banca channel, but the other group company that is SBI Securities, they are our corporate agent. That sales is a very small in volume, and that does not get classified under the banca channel. That is under corporate agent channel.
Prayesh Jain
Yeah.
Amit Jhingran
Yeah. Regarding growth, I mean, even if you look at the three quarters of this financial year, the first quarter was pretty strong, third quarter was pretty strong. So, one quarter growth, 2% or 3% here or there doesn’t matter much. These kind of things do keep happening. But overall growth trend is intact and we stand by that.
Prayesh Jain
Sir, and just to this — the banca channel, do you plan to tie up with more banks and diversify your product or distribution mix further with respect to the banca channel in particular? What is the strategy there?
Amit Jhingran
So, we are always on lookout for good partners and it is an ongoing process. Wherever we get good partners at the mutually acceptable terms, we will definitely be onboarding. So, there is no embargo on that or there are no additional efforts also on that. It is a normal business practice of the company.
Prayesh Jain
Sir, and product level margins, how would they have behaved this quarter and particularly on ULIP, the profitability, how would it have moved in this quarter?
Amit Jhingran
Prithesh, please answer.
Prithesh Chaubey
I think there is not much significant on the margin. So, margins remain, even the product level more or less similar to that, except in the case of non-par or even protection. Because as you know, we have repriced most of the non-par product in the Q2. And Q1, fall of interest rate will pass on to the customer and that’s fully reflected in Q3. So if you look into the Q3 product level margin, there is an enhancement coming from. Also, we have launched some protection rider that’s attached to the saving product and the attachment rate is quite encouraging. So, that’s also helping us to enhance the product line margin. So, more or less product line — margin in the product line is similar, particularly to the annuity product. I think margin is as per our earlier expectation as well. So, not much changes on that side.
Prayesh Jain
Sir, and last question. If you are — you guided for a 15% to 18% kind of a growth, that would be on APE basis, right? And what would be your guidance or outlook on VoNB growth per se?
Amit Jhingran
We are expecting individual APE growth of around 15% to 17% and the VoNB will be in the range of around the current rate, which is going out around single digit or will be around 10%.
Prithesh Chaubey
Okay, sir. So, value of new business growth rate will be lower than individual APE growth. That is what you’re saying? It all depends. So, most likely — ideally, it should be the similar to the APE growth. But if you look at our base or base is much higher and our target for growth is also much higher. So, growing to a higher base with higher growth rate with the same range of margin is a bit difficult task. So, what we are saying that there is risk that already happened. We need to report the margin of 31%. We have stood at 27%. Our objective is to maintain the margin in range of 27% to 29% kind of thing. To that perspective, we are saying that there is a possibility that our VoNB growth might be slightly lower than the APE growth.
Prayesh Jain
This is for FY ’26 — FY ’25?
Prithesh Chaubey
’25, we will — definitely, it will be slightly lower, but going forward it will be longer because even this year already, we grew by 14%. VoNB growth is 6%. So next three months, we can’t compensate that. But my guidance is in the longer-term prospective. On ongoing basis, we expect it to maintain this margin and grow organically.
Prayesh Jain
Got it. Longer term 15% to 17% individual APE growth and VoNB margin in the range of 27% to 29%, right?
Prithesh Chaubey
Yeah. That’s correct.
Prayesh Jain
Right. Got that. Thank you so much, and wish you all the best.
Operator
Thank you. Next question comes from the line of Dipanjan Ghosh with Citi. Please go ahead.
Dipanjan Ghosh
Hi. Good evening, everyone. Just few questions from my side. First, if I look at the embedded value between the third quarter and the second quarter, there seems to be a significant decline. So if you can kind of — I mean, I would assume this would be because of the equity market movements. If you can just break that up. I know you give it on an annual basis, but if you can just give some color on the EV movement, if there were any assumption changes or operating variance on the negative side? And if it was investment variance, if you can break it up between equity and debt?
Second would be your non-par growth through the agency was quite strong during the quarter. So is it a function of both term and pure non-par or — and whether most of it was driven towards the last month of the quarter? And is the new product that is witnessing growth in the fourth quarter also being driven through agency, if you can give some qualitative understanding on that?
And lastly, one question on your agency. When you mentioned that your agent activation rate has increased and you’re witnessing productivity benefits also, could you share some kind of qualitative understanding on the differential in activation rates or the differential increase in activation rates that you witnessed between, let’s say, newer agent versus higher vintage agents and a similar qualitative data on the productivity side?
Amit Jhingran
So, I’ll take the second one first about the agency product mix, which you have asked. Let me tell you that quarter three product mix for agency has been very strong for both non-par protection, as well as for non-par savings and that has also continued in the nine-month ending. The non-par protection has seen a higher double-digit growth, as well as in the non-par protection also, which we expect that it will continue for the fourth quarter. As far as your productivity or activity of agents are concerned, as we have already mentioned earlier in the opening remarks, so productivity level of our agents have been very strong. It has gone up to 2,91,000. And as far as our active productive agents, productivity also has gone up to now 17 lakhs. So, we have been investing a lot as far as agency is concerned and we expect that it will continue to give us not only the growth but also the higher activity because agency growth comes generally from the activity increases and that is what our focus.
On the first part is EV, I’ll request Prithesh to answer.
Prithesh Chaubey
Actually, on the first part, when you mentioned there is a quarter-on-quarter decline in EV, I don’t see there is a decline. EV has grown over the quarter. So from — if I look into December, till December — September to December, there is a 3.1% absolute growth in EV. Also as you know, we keep disclosing the sensitivity of the economic variant — economic sensitivity both in terms of equity and interest rate. If you see, the equity has fallen and to that extent, EV movement is in line with our sensitivity, so mark that.
Second — other point that you ask, we can confirm — though we are not disclosing, we are disclosing the September and eventually, we’ll disclose in the year, all our operating variance is positive. There’s no — and let me — we are always mentioning that we, as a company, we adopt the long-term sustainable assumptions. So, always there is a parity variance coming from each and every component, be the mortality, personal CR [Phonetic] expenses.
Dipanjan Ghosh
Got it, sir. Just one thing I would like to highlight, I think in your presentation, there is some typing error in the Indian embedded value. It’s mentioned as INR618.4 billion. I think the 1 and 8 have got reversed between the BSE filing and the presentation. So…
Prithesh Chaubey
Yeah, I think that…
Amit Jhingran
We’ll update that.
Prithesh Chaubey
So, we’ll update that.
Amit Jhingran
We’ll check and update.
Prithesh Chaubey
We’ll check and update, I would say.
Dipanjan Ghosh
Sure. Thank you sir. And just one follow-up on the productivity for active agents, which you mentioned at 17 lakhs. Could you do a like-to-like number for, let’s say, Y-o-Y or maybe two years back so that you know we can compare it?
Amit Jhingran
So for our agency, as I said, the productivity is increasing and Y-o-Y, I can tell you that agent activations productivity has increased by 16%. And this is generally the phenomena for us, which is an increasing trend for as far as our active agents productivity is concerned. But overall agents productivity also is increasing. So, that is also a very good sign. I think we are one of the best in the private industry as far as our agents productivity is concerned in both the parameters.
Dipanjan Ghosh
Got it. Thank you, and all the best.
Amit Jhingran
Thank you.
Operator
Thank you. Next question comes from the line of Sanketh Godha with Avendus Spark. Please go ahead.
Sanketh Godha
Yes. Thank you for the opportunity. Sir, my question, first question is related to individual protection business. So the individual protection business in APE terms have declined by 18% for nine months. But you said that the mix change towards, what you call, pure protection businesses compared to ROP led to that decline. So if I do a NOP calculation, that is number of policies calculation growth, whether we have seen the growth? And this mix, 63-36, what you alluded to is now have stabled. So going ahead, we can see a growth coming back to protection business or you believe this mix will keep on changing and the growth will remain muted probably till an optimal mix what you want to have will impact the protection business? So that’s my first question.
Amit Jhingran
Sanketh, as we said, the focus is on the protection and that too within the protection — pure protection. And as already mentioned about our quarter three numbers, so it has seen a drastic change in our — from the ROP to pure protection. So now it is stable around, I can say it is between 70-30. We are, at this moment, 63-37. But if we are comfortable that it will be in the range of 60-40 in this year.
As far as our ROP movement, so you said 19% de-growth in the protection, but the massive growth in our pure protection, which is 53% in Y-o-Y and in the ROP, it has come down. But we expect that this overall protection will continue to be good for us in the next two years to three years. As already mentioned, the focus is on YONO and YONO has already garnered 70,000 plus policies and we expect that pure protection will definitely grow and overall protection also is on the focus for the company in the next FY ’26 to ’27. And we will stabilize around 60:40 as the ratio for us in the ROP to non-ROP.
Sanketh Godha
Got it, sir. Sir, but can you — just for nine months, you said 70,000 for the third quarter, but for nine months, the number of policies in the protection has seen a growth and if it is, then what is the quantum?
Amit Jhingran
It has seen a growth. But we — at this moment, we don’t have this. But I can tell you that number in the individual protection, which is in the pure protection, has seen a significant growth of 53%.
Sanketh Godha
Okay. Got it, sir. And the — sir, the second question what I had is, sir, is that you launched a — as you told, the Smart Platina plan, which contributed to INR50 crores to December business. So, just wanted to understand two points. One is that whether the momentum of this growth continues in fourth quarter. You see a product mix change in the fourth quarter towards more non-par compared to ULIPs.
And second thing, if that happens, that impact on the margin? And second, is this product, that is Smart Platina, has a margin better than the overall company average? So if the mix increases, whether it will lead to a better margin profile going ahead. So, that is my second question.
And lastly, the related point is that if non-par APE growth was 7% for nine months FY ’25, then if this contribution increases, will you expect this growth to be much better for full year and then FY ’26 in that sense?
Prithesh Chaubey
So the new product, Smart Platina Supreme, the margin is better than the company margin. So if this product contribute and that we are expecting, that if product contribution will increase, it will help us to enhance the margin going forward. Second part is that we do expect — this product will also have to change the product mix for the company as well and both will result into the better company level margin and better VoNB growth as well.
Sanketh Godha
Sir, but you initially just made a comment to one of the questions that you expect VoNB growth to be lower compared to APE growth. Then if you have already launched a product, which is better margin profile compared to company average and you expect that mix to go up, then I’m just wondering that your VoNB growth to be lower than APE growth doesn’t tie up with the point what you have said right now.
Prithesh Chaubey
So, let me try to reemphasize this point. What we’re saying in the longer term, growing with the high-growth rate and also maintaining the similar level of margin or enhancing the margin will be slightly challenging. So, over the period on a longer-term basis, you see the margin will be — that we mentioned that it will remain in a range of 26% to 29%, with objective to maintain minimum 27% that we are looking for. But some quarter depending on the growth, you may have to rationalize the margin over the period. And then again, even you’re able to achieve the product growth, but if there is a change in the product mix, the non-par reduction may happen and ULIP, that also have some impact. So that’s the reason we are saying that there is a possibility that VoNB growth might be slightly lower than the APE growth. Like we did even — example is for the current financial year, if you look at the last nine months.
Sanketh Godha
Got it. Sir, but on immediate basis, you see a benefit because of the new product launch and there could be a possibility of margin outlook to be better. That’s a fair point to make on near-term basis?
Prithesh Chaubey
Yeah. That’s correct. That’s correct.
Sanketh Godha
Okay. And lastly sir, your total APE growth is 11% for nine months and individual APE growth is 14 for nine months. So just for FY ’25 would you want to give a ballpark number what you will grow at? You gave that number for FY ’26 or little medium term to be 15% to 17%. But for immediate fourth quarter included, what kind of a growth we can expect for ’25 on total APE and individual APE separately?
Unidentified Speaker
So, we will maintain the same rate of growth what we have done nine months for this financial year. So as we have already mentioned previously, Sanketh, the individual APE will be in this range of 14% and total APE will be in this range of around 10% to 11%. Strategically, if you have seen that why the overall APE has come down is because of the group fund management business where already has MD in the opening remarks said, so the market where we want to be in a profitable business. So, that is the reason we are concentrating on individual APE this financial year around 14%, 15% and this total APE of around 10% to 11%.
Sanketh Godha
Got it sir. Perfect. Thanks. That’s my questions.
Amit Jhingran
Thank you.
Operator
Thank you. Next question comes from the line of Rishi Jhunjhunwala with IIFL Institutional Equities. Please go ahead.
Rishi Jhunjhunwala
Yeah. Thank you for the opportunity. Just a couple of questions. Firstly, on the margin side, I just wanted to understand you’ve been able to maintain margin sequentially, whereas the product mix has gotten tilted even more towards ULIPs in this quarter. So, what were the tailwinds that helped you in this quarter? And also you mentioned 27% to 29% in the long term, then outside of a change in product mix where, say, ULIP comes down and traditional goes up and protection goes up in the future, are there any other levers that you can call out?
Prithesh Chaubey
On the first part, despite ULIP, margin growth, as I mentioned, there are multiple reasons for that. First reason that we have explained a few minutes back that in Q1, we are not able to take — pass on the impact of the unit-linked on this. And that part, we have — all the non-par part, we have repriced in the Q2 and that’s reflected the full — fully reflected in the Q3. That’s the reason the non-par margin has gone up as compared to Q1. So, that’s compensated to some extent the impact on the — adverse impact on the margin on account of increasing unit-linked business. Also, as we mentioned that we launched several protection products and we also mentioned that pure protection has better margins. So, that’s also helping us.
Other aspect is that we have launched the protection rider and attached to our saving product and attachment rate is also quite encouraging. That is also helping to enhancing the margin of that. So despite the product — non-par product do not move any stable in the similar level, we have seen this. Other aspect that we mentioned that we get some better terms and condition from the reinsurer, particularly for the credit life business. And that also help us to enhance the product level margin. And all together, if we club together, that helps to maintain the margin, even enhance the margin for this quarter. If you look into the quarter on a sequential basis, despite that, ULIP mix has increased. And we are also working and we’re going to launch protection rider on the unit-linked business. And we hope that this also help us.
Other point is other than product mix, there will always be the lever and that we keep saying that as a company, we try to optimize the value both for the company as well policyholder. And then in that prospect, we are evaluating and exploring each and every customer segment and try to design the product for that particular segment, optimize value and thus, optimization and segmentation is helping us to enhance the margin. And that is another lever available with us going forward that may improve and enhance our margins going forward.
Rishi Jhunjhunwala
Okay, sir. And just second question on banca. And I know in different ways, it has been asked during the call. But just want to get some color on — in terms of slightly medium-term growth from our parent bank, for us to grow double-digit in that channel, how much of it is dependent on the penetration levels being lower and the bank willing to push that versus some of the base effect that is already there and probably a caution around the products being sold. So, what I’m trying to understand is how do we get comfort that, that channel even in future with the kind of base we have we’ll continue to grow double digit if at all?
Amit Jhingran
See, for channel in the banca particularly, we are concentrating, as initially said, not only for SBI particularly, but other banca partners also. So, we have currently five banca partners and we also have tied up with Indian Postal Payments Bank. So all across, we are seeing that how to penetrate or increase our penetration and across the partnerships. As far as the current quarter is concerned, so we have seen with a big base. So last year, if you remember, the industry grew by 8% and we grew by 18%. With such a large base of the third quarter, that is the biggest quarter for us, we have seen a growth in the banca also.
So, we believe that there are lot of levers available for us in the penetration, particularly because we have seen till date, the heart rate is 2.5% to 3% penetration in the overall market in the banking side whoever our partners are. And we will capitalize all our relationships with various models, which we have already been very successful. And we expect that the penetration will increase and the growth will come back. So whatever we have seen during this financial year, I think it will settle down as we have already mentioned. And there are various news, which we don’t see that any point of reaction. But going forward, it will definitely help us for improvement in our growth rate for these banca partners along with SBI.
Rishi Jhunjhunwala
Okay, sir. Thank you. All the best.
Operator
Thank you. Next question comes to the line of Raghvesh with JM Financial. Please go ahead. Mr. Raghvesh, please go ahead with your question.
Raghvesh
Yeah. Thanks. And congratulations on a strong set of numbers. Sir, just a couple of questions. First, on the protection piece side, I’m just doing some math. Sir, around INR100 crores would have come directly from the new protection plan that you’re selling through YONO. So is there a conscious decision to stop selling ROP products? And is it because there has been a poor mortality experience in that segment? Understanding is ROP is typically sent to — sold to a less affluent segment. So, have we seen some negative mortality experience on that?
Amit Jhingran
No, it is purely a customer’s choice. And in this particular product on the YONO channel, we have seen a welcome kind of change that customers are going in for pure protection product. There is no conscious decision. We are offering both the options to the customer. But this is a welcome change that customers are opting for pure protection product.
Sangramjit Sarangi
But you do note that under the new guidelines, we have stopped one small ticket ROP, which we used to sell early. So to that extent, there will be some reduction in ROP in the future.
Raghvesh
Okay, sir. Thanks for this. And secondly sir, with a very strong under-penetration of insurance, the 10% growth target from banca, I mean, is it not very low?
Amit Jhingran
You see, there is a lot of under-penetration and under-insurance both in Indian market. And the same kind of demography is in the State Bank Customer Group also because the State Bank has now 53 crore plus customers. Almost every third Indian is having an account with the State Bank. So, we are very sure that the growth in the banca channel will be in line with the industry growth at least. And that is why we are projecting these kind of numbers. You would have gone through this special [Phonetic] report, also their expectation for the Indian industry to grow is around 7% — 7.3% for next five years. So, projecting a 10% growth, I think that is a fair enough number. But we are all set to explore and exploit all kind of opportunities available in the market.
Raghvesh
Thank you, sir. Thanks for your answer.
Operator
Thank you. Next question comes to the line of Neeraj Toshniwal with UBS Securities. Please go ahead.
Neeraj Toshniwal
Hi, sir. So, just one question on credit life. I’ve missed the number. How has been the growth in this quarter and Y-o-Y in APE terms?
Unidentified Speaker
So, credit life this quarter has grown 16% over last year.
Neeraj Toshniwal
Okay. And quarter-on-quarter?
Unidentified Speaker
Quarter-on-quarter only I’m saying. Q3 FY ’25 compared to Q3 FY ’24. That is 16%.
Neeraj Toshniwal
Versus Q2?
Amit Jhingran
Q2 versus Q3.
Unidentified Speaker
Sequential growth is also there quite strong.
Amit Jhingran
Q2 was a little muted on the credit life side. So, Q3 numbers are much better than that.
Unidentified Speaker
It would be 20%, 25% growth over Q2 according to me. I have not….
Neeraj Toshniwal
What is the absolute number if you can share this quarter, absolute credit life APE?
Unidentified Speaker
No, no. I will give you growth. 17% growth should be there sequentially.
Neeraj Toshniwal
And absolute number in APE?
Amit Jhingran
INR171 crores.
Neeraj Toshniwal
Okay. Okay. Thank you so much, sir.
Operator
Thank you. Next question comes from the line of Gaurav Jain [Phonetic] with ICICI Prudential Mutual Funds. Please go ahead.
Gaurav Jain
Sir, congratulations on a good set of numbers. And also sir, helpful to see that you have started giving EV disclosure on a quarterly basis, sir. That is also helpful. Sir, two questions from my side. One is on reported profit after tax, we are seeing very strong growth both on a quarterly basis and on the nine month basis. If you can shed some light as to, is it the new normal where we can expect the PAT to really grow in this manner? Or is it this year phenomena and if you can help us understand what exactly helps the PAT grow?
Second, sir, on this new non-par product that we have launched and growing and also maybe on the existing products that we have, have we set the clawback provision or the deferred commission payout structure, etc., in place? Thank you.
Amit Jhingran
So coming to your first part, which is profit after tax. So, this is a reflection of multiple things. One is that the major contributor of the profit is coming from the investment income. So, investment income from both, from our traditional portfolio, which is excluding par. So, non-par and shareholders has contributed the profit for the company. And secondly the back book also is very strong for us. So, renewal premium has grown by 15%. So, there is a big back book available for us through which we are garnering good numbers as far as the total PAT is concerned.
And secondly, the profit growth projection which is currently seen, we will not give you any kind of guidance because it depends on the product mix and the kind of market movement during that period of time. So because today, we have made profit because of the lesser growth in my traditional business as compared to ULIP business. So if tomorrow the product mix shifts towards more on non-par and par, so there will be a strain on the PAT. So at this moment, we expect that it will be in the range of around 10% to 15% growth for the year-on-year as far as PAT is concerned. And then on the new product, the new non-par which you asked, I think I’ll request Prithesh to…
Prithesh Chaubey
The commission is in line with our previous product. The commission structure has not changed. The benefit structure has changed slightly, but commission structure has not changed yet.
Gaurav Jain
Okay, sir. Thank you, sir.
Operator
Thank you. The next question comes from the line of Madhukar Ladha with Nuvama Wealth Management Ltd. Please go ahead.
Madhukar Ladha
Hi. Congratulations on a good set of numbers. Just couple of questions. See, the medium-term growth you’re still guiding for is 15% to 17%. Now, banca channel, as I understood is not expected to grow that fast. So it will probably grow at the whatever 8% to 11% sort of a range and it’s contributing almost about 65% to individual APE. That basically means that the other channels have to grow at almost probably 25% sort of a number.
Now my question is that what is our right to win? How will we be able to recruit that productive and agency channel? And we are also not that competitive when it comes to commission payouts. So, would that mean that in order to grow at this rate, we would have to, like, aggressively also increase our commission payouts and that would then also result probably in an impact on the margins coming from this channel. So, some sort of a clarification and like, what confidence do you have that you will be able to grow that other channel at that faster rate and the margins from that channel. So, that would be my question, if you can give me some color on this.
Unidentified Speaker
So, we’ll just tell you that agency channel for SBI Life has been a consistent growth story for many years now, so more than 10 year to 15 years. And the pressure to pay commissions or whatever you are mentioning has always been there. It’s not a new phenomenon. Our advantage is that our dependence on few agents is very limited. We have a very wide base of agents and activation rates, which are quite good compared to some of the other players and that helps us widen the agency distribution. We think this strategy we will continue and it’s a sustainable strategy by which we will be able to grow the agency channel without having to really compete on commission. Commission competition happens largely for very large agents and not for mass of agents. And large part of our business comes from mass of agents. And there is enough and more scope in India to recruit more agents and grow.
Amit Jhingran
And we are helped in this particular aspect by being — by having a very strong brand where people have a lot of trust. So despite whatever shortcomings you talked about of the agency channel, we have the largest agency channel in private sector and it is second only to LIC in India. Despite all these shortcomings, we have been able to create that kind of sales force in the market. And with the kind of policies we have for our agents, we are pretty sure that we will continue to grow in an even better manner in coming times with the kind of opportunities that we have across India.
Madhukar Ladha
Okay. Just a follow-up also on protection. You mentioned that 63% is now pure protection — sorry, is ROP and 37% is pure protection. I just wanted a clarification. This is on value basis, right, on premium basis, right, because — or is it on number of policies?
Unidentified Speaker
Madhukar, the overall nine months ending the ROP to non-ROP has moved from 90-10 to now 80-20. And we said for the quarter three, this ratio has changed to now 63-37.
Prithesh Chaubey
And this is on premium basis.
Unidentified Speaker
Premium basis.
Madhukar Ladha
This is on premium basis.
Unidentified Speaker
Yeah.
Madhukar Ladha
Understood. Got it. Got it. All the best. Thank you.
Amit Jhingran
Thank you.
Operator
Thank you. The last question comes from the line of Supratim Datta with Ambit. Please go ahead.
Supratim Datta
Yeah. Thanks for the opportunity again. I had just one follow-up. So if you could give us some clarity around how does the cost structure in bank versus agency differ? And hence, given we are now going to grow faster in agencies — we have been growing faster but you know that proportion is going to go up. Then how does that impact the VoNB margin? Because just wanted to understand if one ULIP or one non-par is sold in bank versus in the agency, how does the margin or cost structure differ there? If you could give help me understand that, that would be very helpful.
Amit Jhingran
See, the major component, the differentiator between the banca and agency is the fixed cost in agency as compared to banca. As far as the commission structures are concerned, it is almost similar. And for us, as already said, the agency is a consistent investment for us, which we have been doing it for last two decades and we will continue to do that. The cost efficiency, which are coming from agency is through product mix and the persistency and that is very well reflected in our all parameters as far as the margins or the VoNB is concerned. And we don’t expect any challenge per se for our agency margin to go further down as compared to banca because banca is definitely profitable for us as compared to agency. But yes, at the same time, the product mix also plays a bigger role and we expect the product mix the way it is now stepping up in agency will definitely give us the better margin going forward.
Supratim Datta
Got it. And could you quantify how much is the delta between bank and agency VoNB margin?
Unidentified Speaker
Generally, that is not — it depends on various parameters, so we don’t disclose on those aspects.
Supratim Datta
Sure. No problem. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Amit Jhingran for closing comments.
Amit Jhingran
Thank you, everyone, for the time and all the queries. I hope that all the queries were responded to — by our team and me in a satisfactory manner. But just in case you have anything else, you can get in touch with our Investor Relations team with any follow-up question. Thank you once again. God bless.
Operator
[Operator Closing Remarks]