SBI LIFE INSURANCE CO LTD (SBILIFE) Q3 FY23 Earnings Concall Transcript

SBI LIFE INSURANCE CO LTD (NSE: SBILIFE) Q3 FY23 Earnings Concall dated Jan. 21, 2023

Corporate Participants:

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Prithesh Chaubey — Appointed Actuary

Sangramjit Sarangi — President and Chief Financial Officer

Analysts:

Avinash Singh — Emkay Global Financial Services — Analyst

Ansuman Deb — ICICI Securities — Analyst

Swarnabha Mukherjee — B&K Securities — Analyst

Shyam Srinivasan — Goldman Sachs — Analyst

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Sanketh Godha — Spark Capital Advisors — Analyst

Neeraj Toshniwal — UBS — Analyst

Dipanjan Ghosh — Citigroup — Analyst

Nidhesh Jain — Investec — Analyst

Amit Jain — Axis Capital Limited — Analyst

Deepika Mundra — J.P. Morgan — Analyst

Nischint Chawathe — Kotak Securities — Analyst

Supratim Dutta — Ambit Capital — Analyst

Pallavi Deshpande — Sameeksha Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q3 FY ’23 Earnings Conference Call of SBI Life Insurance Company. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Mahesh Kumar Sharma, MD and CEO, SBI Life. Thank you. And over to you, sir.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Thank you very much. Good evening, everyone. And we heartily welcome you all to the results update call of SBI Life Insurance for the period ended December 31, 2022. Update on our financial results can be accessed on our website, as well as on the websites of both the stock exchanges.

Along with me, I have Mr. S. Veeraraghavan, Deputy CEO; Sangramjit Sarangi, President and CFO; Ravi Krishnamurthy — sorry, Ravi is not there; Abhijit Gulanikar, President, Business Strategy; Subhendu Bal, Chief Actuary and Chief Risk Officer; Prithesh Chaubey, Appointed Actuary; and Smita Verma, SVP, Finance and Investor Relations.

Now let me give some key highlights for this period ended 31 December, 2022. New business premium registered a Y-o-Y growth of 14%, and stands at INR215.1 billion, leading to private market leadership. Individual new business premium stands at INR152.4 billion, with a strong growth of 31% and private market share of 27.2%. Gross written premium stands at INR473 billion, a growth of 15%. Protection new business premium grew by 25% to INR25.5 billion.

Profit after tax stands at INR9.4 billion, with 13% growth over corresponding period last year. Value of new business is INR36.3 billion, registering a strong growth of 44% over INR25.3 billion in December ’21. And VNB margin is at 29.6%, with an improvement of 478 bps over 24.8% in December ’21. Assets under management grew by 17% to INR2.9999 trillion. Robust solvency ratio of 2.25 as against the regulatory requirement of 1.5.

I would also like to highlight on a few key initiatives taken by the company, with a view to offer whole life saving products and keeping in mind the evolving needs of customers. We have launched SBI Life Smart Lifetime Saver, an individual, non-linked, participating, whole life insurance savings product, especially designed for customers who are looking for a product with income for whole of life. The product offers annual guaranteed as well as non-guaranteed survival income.

We will now update you on each of the key elements in detail. Let me start with the premium. Individual new business has grown to INR152.4 billion, with a growth of — Y-o-Y growth of 31%. Single premium contribution is 30% of individual new business premium, which is mainly attributed to our growth in our individual annuity product. The company gained the private market share by 262 basis points to 27.2%.

On individual rated new business premium, we stand at INR111.4 billion, with Y-o-Y growth of 23% and maintaining our leadership position with private market share of 25.7%. Also, group new business premium stands at INR62.7 billion, with a share of 29% in new business premium. We have collected total new business premium of INR215.1 billion, registering private market share of 23.1%. The renewal premium grew by 15% to INR257.9 billion, which accounts for 55% of GWP.

To sum up, the gross written premium stands at INR473 billion with a Y-o-Y growth of 15%. In terms of APE, premium stands at INR122.6 billion, registering a growth of 20%. Out of this, individual APE stands at INR112.4 billion with a growth of 23%.

During the period ended December 31, 2022, a total of 15.67 lakh new policies were issued, and it registered a growth of 20%. Individual new business sum assured registered a growth of 14% over corresponding period last year, as compared to growth of 5% at private industry level. Considering our robust performance for the period ended December ’22, we continue to expect strong growth in our performance for Q4 in FY ’23.

Now something about the product mix. As on December ’22, our guaranteed non-par savings products are contributing 17% of individual new business and on individual APE basis, this contributes 24%. Non-par guaranteed product new business has registered a Y-o-Y growth of [ 147% ], mainly due to the new business contribution of Smart Platina Plus of INR19.4 billion in the period ended December 31, 2022. This product was launched in March ’22, and has seen a strong traction in the new business premium, mainly due to the product features witnessing high acceptance in the market.

Individual ULIP new business premium is at INR83.7 billion, which now constitutes 55% of the individual new business premium. Individual protection new business premium is at INR7 billion, registering a Y-o-Y growth of 12%. Group protection stands at INR18.5 billion with a growth of 30%. Credit life new business premium has grown by 27% and stands at INR14.5 billion. On APE basis, protection contributes 10% of the new business and registered growth of 18%.

Annuity business is at INR33.6 billion, and contributes 16% of new business premium. Under annuity, the company is offering immediate as well as deferred annuity option. Individual annuity business is growing at 139% over last year. This is mainly due to new business contribution of Smart Annuity Plus of INR25.3 billion. Total annuity and pension new business underwritten by the company is at INR60.4 billion, registering growth of 10% over the same period last year.

With strength of more than 54,000 CIFs, SBI and RRB Bancassurance contributes a share of 69% and grew by 37% in individual new business premium. And on individual APE basis stands at INR78.2 billion with a growth of 25.3%. Agency, one of our other strong channels, registered new business premium growth of 22% and contributes 18% in new business premium. Agency channel individual APE stands at INR29.5 billion, a growth of 15.1%. As on December 31, 2022, the total number of agents stands at 1,93,635. During the period, the company added 47,578 agents net.

During the period ended December 31, 2022, other channels, including direct, corporate agents, brokers, online and web aggregators grew by 48% in terms of individual new business premium and 42% in individual APE. Protection new business premium through other channels registered a growth of 36%. Partnerships like Indian Bank, UCO Bank, South Indian Bank, Punjab & Sind Bank and Yes Bank registered a growth of 49% in individual new business premium. These partnerships have contributed 3% of the individual new business premium.

Now to come to profitability, the company’s profit after tax for the period ended December 31, 2022 stands at INR9.4 billion with 13% growth Y-o-Y. Our solvency remains strong at 225% as on December 31, 2022. Value of new business is at INR36.3 billion with a growth of 44% Y-o-Y as against INR25.3 billion in the corresponding period last year.

VoNB margin is at 29.6% vis-a-vis 24.8% for the period ended December 31, 2022 with an improvement of 478 basis points. Growth in VNB and VNB margin is driven by change in product mix, predominantly in non-par segment and business volume. With our growth targets and the product mix shift, we expect to maintain a healthy VNB growth rate.

Operational efficiencies parameters are robust. Opex ratio stands at 5.2% for the period ended December 31, 2022. Our total cost ratio stands at 9.7% for the period ended December 31, 2022. With respect to persistency of individual regular premium and limited premium paying policy term, 13-month persistency stands at 84.6%. Company has registered a significant improvement in 49th and 61st month persistency by 178 basis points and 491 basis points, respectively. We have witnessed improvement in persistency ratios across major cohorts.

As mentioned in my opening remarks, assets under management stands at around INR3 trillion as on December 31, 2022, having growth of 17% as compared to December ’21. The company continues efficient use of technology for simplification of processes, with 99% of individual proposals being submitted digitally. 45% of individual proposals are processed through automated underwriting.

To concludes, we continuously endeavor to maintain our leadership position and continue to further increase our market share by offering products that meet the evolving needs of our customers, with our widespread robust distribution network complemented by digital technology, our innovation strength and above all, our people power.

We are pleased to make the most of abundant growth opportunities offered in India’s underpenetrated insurance sector. We are committed to enhancing digital experiences for our customers, distributors and employees. Further, we shall continue to explore new partners, leverage existing partnerships and launch new products that meet customers’ needs and provide seamless customer experience.

Thank you very much for a patient hearing. And now we are happy to take any questions that you may have.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Avinash Singh from Emkay Global. Please go ahead. Avinash Singh. Please go ahead with your question. Yes.

Avinash Singh — Emkay Global Financial Services — Analyst

Hello. Yeah. Am I audible?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Go ahead.

Avinash Singh — Emkay Global Financial Services — Analyst

Hi. Yeah. Good evening. A couple of questions. First one on the FFA build up. This — I mean, of course, till Q3, you generally have a FFA build up. In Q4, you release something. But the kind of quantum of FFA build up in the Q3, it seems to be on the higher side. So can you just please explain why this sort of a — a bit of a FFA you’re building is something to do with your product mix or something else that I’m not getting? That’s one.

Second, if I am understanding it correctly, the VNB sensitivity to reference rate is negative. But if I see the VNB margin walk Y-o-Y, there I see a positive impact of risk period going up. So what am I missing here? That’s the second.

And thirdly, if I look on the commission side, I mean, of course, you are much lower versus peers. But I mean, overall, if I see even kind of a factoring in the new business growth being higher, a bit higher growth on the commission side. Is it something to do with the product mix changes? Or have you sort of increased some bit of commission in existing product in efficient channels? So, three questions.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you very much. Yes. I’ll take the last question first. So the product mix has changed and therefore, the commission mix has changed. So this is purely on the basis of product mix. We have not changed. Largely, we have not changed anything significant in the commission rates assets.

Coming to the other points, Prithesh kindly go ahead with the FFA build up and what’s missing on that.

Prithesh Chaubey — Appointed Actuary

Thank you, sir. So, Avinash, thanks for the question. Let’s take the VNB one. So when we compute the VNB, we don’t take any assets backing. So that’s the reason why interest should go up. You see the parity of late [Phonetic] coming from. When you do the sensitivity, we do take the asset backing benefit. So if you see, we are writing a lot of non-par products and to hedge the interest rate risk, we do write forward rate agreements. Now, when interest will go up, MTM losses will incur on the FRA. And that’s the reason you are seeing the sensitivity is giving a negative direction in upward scenario, where as in normal walk, you are getting a parity. In general, if I have to remove this FRA benefit, you might be seeing the parity sensitivity on the interest rate as well.

Avinash Singh — Emkay Global Financial Services — Analyst

Yes. Very clear. Very clear. So if you can help me on FFA, yes?

Prithesh Chaubey — Appointed Actuary

And FFA, you see the Smart Elite [ Phonetic] FFA, we normally declare asset share calculation, declare the bonuses and recommend in the third quarter. But certainly we see a lot of improvement in the par persistency over the period. And when a policy get revived, you will get significant premium and because — and then you have to ultimately go and declare those bonuses. So, these are natural things.

And second thing, you see, the par business has not done to that extent that need to happen. So par business, you’re right, more non-par business, you utilize some of the FFA. So that’s the reason FFA is building up. There is no changes done to build up the FFA. It’s a normal thing. And end of each year, we will review these things. And additional FFA will be utilized to distribute the bonus to the policyholder in the current year and the future as well.

Avinash Singh — Emkay Global Financial Services — Analyst

Okay. Okay. Okay. So that’s clear. And one just a small data keeping if you can allow. Can you, I mean, give a broad idea of number of in-force policies currently in SBI Bank channel? I mean, I just want a broad sort of a number to get broadly that, okay, where — I mean, we could be where it’s a potential. So number of in-force policy in SBI Bank?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I think we will send you the information, okay, because, I’ll have to dig it up.

Avinash Singh — Emkay Global Financial Services — Analyst

Okay.

Operator

The next question is from the line of Ansuman Deb from ICICI Securities. Please go ahead.

Ansuman Deb — ICICI Securities — Analyst

Yeah. Good evening, sir. And thanks for the opportunity. My question is on the product trends that you’re seeing. So, we have seen a little bit of improvement in the ULIP mix in this quarter. So, I just wanted to understand the sense of demand that you’re seeing on ground, be it protection because some of your peers have indicated that there has been an inflection point in terms of quarter-on-quarter growth in protection. And also non-par segment because of the higher interest rates and you have shown improvement in ULIP. So if you could give a broad outlook on the demand outlook on each of these segments.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So, see, basically protection is something which is growing. And so for us also it’s growing. And till December end, we have 25% growth over last December. So, this is a good trend that we have. And we think that it will be there for some more time, even though there is no COVID effect like last 2 years, when there was a sudden spurt in the demand in some of the quarters. But we have been growing steadily over the last 4 years in protection quarter-on-quarter. So, we will continue to keep growing at a good pace in protection.

Now coming to ULIP. So, we had said earlier also that when other things are all equal, then, obviously, ULIP — we have got very good ULIP products, which have been in good demand. So, ULIP demand will be back. And even though it was growing always, but I think the growth has slightly accentuated in this quarter. So, that is definitely there. Going forward, I think non-par guaranteed will continue to see a good traction. ULIP, of course, will definitely, because right now the markets are also good. And people are — I think people have come out of that fear of the markets suddenly moving or something. So maybe the demand will go up, but we had earlier also seen good traction. Even when the markets were doing so many things, we were seeing good traction in ULIP. So, we will continue to see good growth in ULIP.

Ansuman Deb — ICICI Securities — Analyst

Thank you. And one just follow up on that. Any particular channel where you are seeing an improvement in ULIP and if you have any overall margin guidance for this margin and volumes guidance for this year?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

It is across the board. So the ULIP growth and the business growth, both is there in all the channels. So, I don’t think we will pick out any particular channel for any particular product.

Ansuman Deb — ICICI Securities — Analyst

And would you have any margin or volume guidance for this year FY ’23?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So margins have been very good for us. So it will, of course, change a little bit here, there with the product mix. But largely, it is going to be around what we have right now.

Ansuman Deb — ICICI Securities — Analyst

Thank you, sir. I’ll get back in the queue.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you.

Operator

Thank you. The next question is from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead.

Swarnabha Mukherjee — B&K Securities — Analyst

Yeah. Thank you for the opportunity. Sir, so couple of questions. First one on the product mix. So now ULIP mix for the third quarter is quite close to what it used to be earlier. Now, I wanted to understand, would we be having some kind of a target mix in mind? Or we will kind of offer the products to the customer and then let the product mix take the shape? What would be our strategy in this because earlier I thought — yes, so just…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Last, what you said is what I’ve been maintaining for a very long time now. We actually have the entire product suite and we offer to the customers and whatever comes out of that. Of course, we get the feedback from the customers, what products are good, what are — and we do keep changing or adding products to the bouquet. But largely, we don’t really aim for a particular product mix. But then what we would be looking at probably is about 60% around, thereabout ULIP and remaining to come from the other products. So that’s largely around. So, I wouldn’t be worried about 4%, 5% here and there, because finally what the customer wants and if it is giving good margins and it’s giving a good product to the customer, then I think it’s a win-win for both. [Technical Issues]

Operator

Ladies and gentlemen, thank you for patiently holding your lines. The management line is reconnected. Thank you. And over to you, sir.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you very much. So, I don’t know Mr. Mukherjee, how much you were able to gather. So, I think you must have got my reply.

Swarnabha Mukherjee — B&K Securities — Analyst

Yes, sir. Broadly got it. So, I just wanted to just wanted to understand that between, sir, second quarter and third quarter, what had changed that resulted in this appetite for ULIP? Is it only the markets? Or anything in the product that we have done or any commission structure we have changed for our channels [Technical Issues]?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

We have been maintaining all along, I don’t know if you were on the call last quarter and the quarter before. I have always been maintaining that ULIP demand will be there. It has always been there. It’s only that the pent-up demand for non-par was probably very high in the beginning couple of quarters because we didn’t have that product in our suite. And now that we had that product, we had a huge demand for that and that growth sort of probably overshadowed all the other growth. But otherwise, our ULIP has been growing steadily. And I think it’s just part of that, continuation of that. There is nothing spectacular about it.

Swarnabha Mukherjee — B&K Securities — Analyst

Okay, sir. That’s helpful. In the non-par product, this new variant, what would be the contribution in terms of APE within the non-par basket?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

23%. 22%?

Sangramjit Sarangi — President and Chief Financial Officer

26%.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

26%.

Sangramjit Sarangi — President and Chief Financial Officer

26%. And given that, this environment, I mean, this particular segment is very competitive and few players have also increased pricing.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I’m sorry. 22%, yes. 22%.

Swarnabha Mukherjee — B&K Securities — Analyst

Okay. So given that this segment has become very competitive, so how are we — in terms of margin, are we able to maintain the margin or are we taking some amount of impact on the margin to ensure that there is a pickup in our product?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

[Foreign Speech] I don’t think we are taking any impact on the margin or anything of that sort. And really, that — the non-par product, like I said that there was a demand and there was a pent-up demand and that was what we saw earlier and I think the demand will go on.

Swarnabha Mukherjee — B&K Securities — Analyst

Okay. And sir, just to clarify, because these are all income products and longer duration, would it be fair to assume that they will have a margin profile, which would be much better compared to the endowment variant that we had, the older version?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. It will be slightly here or there, slightly high.

Swarnabha Mukherjee — B&K Securities — Analyst

Okay. Thank you, sir. That’s all from my side.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you. Thank you very much.

Operator

Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.

Shyam Srinivasan — Goldman Sachs — Analyst

Good evening. And thank you for taking my question. Just the first one on the SBI productivity per branch, I think we had about…

Operator

Good afternoon, Mr. Shyam. But we are unable to hear you clearly. Your voice is sounding little muffled.

Shyam Srinivasan — Goldman Sachs — Analyst

Okay. Is it better now?

Operator

Yes. Please go ahead.

Shyam Srinivasan — Goldman Sachs — Analyst

Yeah. So the SBI productivity per branch, the number was about 40 lakh last first half. We’ve seen it jumped to 62 lakh. Is it just seasonality that the bank starts doing more in Q3, Q4? Is that the explanation? Or have we done anything in terms of a strategy to kind of push up the productivity in the SBI branches?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

The seasonality takes care of that. It is normal.

Shyam Srinivasan — Goldman Sachs — Analyst

Got it, sir. So when I look at you and compare versus some of the private peers, this number we are now closer to where some of them are. Do we think there is upside here from a productivity per SBI branch perspective? And what’s working for us, because we have now bridged the gap between them? But if I were to look at penetration numbers of SBI bank customers, I don’t think it’s the same. So just if you could help us understand what’s happening at the branch level?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So, we have been expanding the market. If you look at the number of policies that we sell, the growth has been huge. I’ll just give you a sense of the number. NOPs growth over last…

Sangramjit Sarangi — President and Chief Financial Officer

Policies? Number of policies growth was 22%.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. 22% policies growth. And in a market, where almost — if you look at the industry, the policy growth has been negligible. So in that industry, like you look at 1-year CAGR, 3-year CAGR, our number of policies growth is huge. So that explains the slight difference in productivity that you may find with other players. So, we are selling everywhere, not only in Bombay, Delhi, but we are selling in all the places across the country. And we are introducing newer, newer players to the market, newer buyers to the market, newer people who are insured. Obviously, the ticket sizes are going to change a little bit and therefore, the productivity is going to be slightly lower. But going forward, we would look — track the number of people that we cover the NOPs, plus the average ticket sizes, which are increasing and plus the number of branches that are selling. So, all these parameters will keep increasing.

Sangramjit Sarangi — President and Chief Financial Officer

Shyam, to just clarify further, we do expect our productivity per branch of SBI to go up. And you rightly pointed out that we have not penetrated the customer base of SBI. There is still some leeway there for us to catch-up and increase our business through the SBI channel.

Shyam Srinivasan — Goldman Sachs — Analyst

Is that just data point? Is that number like 2% of SBI Bank customers have an SBI Life policy? Is that…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

It is very rough because we don’t have the exact data of SBI customers. I wouldn’t…

Shyam Srinivasan — Goldman Sachs — Analyst

Fair enough, sir. Second question and last question. Yes. Got it. Second and last question just on protection. Just going back to some of the earlier participants. Nine months we have got 18% APE growth, but retail has been slower than group. But if I look at Q-o-Q like Q3 versus Q2, there is actually no growth. In the sense, it’s flat. If I were to look at Y-o-Y on retail, Q2 was a 3% or 4% decline. Q3 is just plus 4%. So just want to understand competitive dynamics here, sir. I think many of our peers now have launched the ROP product. Some of the peer 2 days back has 30% coming from ROP versus 0, 3 or 4 quarters back. So anything that you’re seeing from a competitive standpoint that is leading us to lower retail protection growth?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

See, our customer base is totally different from what the others are selling to. So, I’m not trying to sell to the same people. So the question of somebody preferring somebody else’s TROP over mine is like very vague because our agency is one of the strongest and we are there in so many banks. So, really speaking, when I’m pitching to the customer, I’m pitching to him and we have been selling TROP for such a long time.

It is probably some kind of a catch-up that many of these people may be doing on the TROP because they didn’t have this product. And now they are able to pitch that product or something like that. But having said that, our protection growth has been quite strong. If you compare the particular quarters that you are comparing right now, you will find that they have grown — our protection has grown in those quarters. And that is why you may find that the comparison is like flat. So that is the only reason I can ascribe to it. Our demand for protection has not been affected by any other company bringing in any product, singular product.

Shyam Srinivasan — Goldman Sachs — Analyst

Got it, sir. Thank you and all the best, sir. Thank you.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Madhukar Ladha from Nuvama Financial Services. Please go ahead.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Hi, good evening, and congratulations on a good set of numbers. I had two quick questions. One, what are the margin buffers you have? I know that you change your assumptions at the end of the year. So, I wanted to get a sense of, if there is any — are there any areas where you could see some positive or negative variance, some color on that, persistency, mortality expense assumptions that could help or drag margins?

That — and second, your agency continues to do very well and you’ve beaten peers by a big margin, if I look at it over a longer duration of time. So, can you help us understand what really has driven this good performance?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So about the margins, really speaking, we don’t have anything to say. So, we have given you color about the products that we are expecting to sell and all that. So, I wouldn’t like to add anything to that. But about the agency, see, the idea is that we are doing a lot of things there. We have increased the agency force and now we have not yet got the entire fruit of the efforts that we have put on the ground. So, we have increased the agency force by a huge number this year, almost 45,000, 46,000 people we have increased this year. And that — the benefit of that is going to come now.

So really speaking, whatever we see in the agency, we’ll probably see the growth coming — heavier growth coming forward — going forward. So, we are doing the right things out there. We are taking care of our agents. We could say that we are generating so much employment out there. And our training philosophy and our training methodology is very good. And we have a very good sales for supervising these agents. So, I think these are the things. You do the right things and you’ll get the right results.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Sir, one more question on — with the new framework coming or at least right now in introductory phase, commission caps are expected to be removed. Wanted to understand how is SBI thinking about it? Have we had any discussion? Could SBI come and increase commission rates for us?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So, really speaking, that you’ll have to ask SBI. But right now we don’t expect any such thing. More importantly, it’s not only the commission cap that matters. It is a whole other host of things that are actually involved in that. And then even if the caps are gone, it is not as if you can simply pay through the nose to get business. You have to have a Board approved policy, and then there will be so many other things that are to be taken into it. So, I don’t think that it is going to change the ground reality too much.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Okay. Thank you. Thank you, sir.

Operator

Thank you. The next question is from the line of Sanketh Godha from Spark Capital. Please go ahead.

Sanketh Godha — Spark Capital Advisors — Analyst

Yeah. Thank you for the opportunity. Sir, when we see the non-par business which you said, pent-up demand led to the growth, but if you look at from second quarter to third quarter, the growth seems to be plateauing around INR950 crores and INR960 odd crores. So given the deposit rates are moving up across the bank, is it required that we need to up the IRRs in the non-par product to probably drive the growth further from what you have achieved till date? That is the first question what I have.

And the second question, sir, is that our ticket size in non-par is 60 percentage of probably ULIPs. So if we really want to achieve the growth what we have guided somewhere around 20 to 25 percentage for the entire year and subsequently. So ULIP still remains the core given the ticket size is higher. Sir, really, given this quarter growth is driven by ULIPs predominantly or more importantly by ULIPs, sir, you believe that ULIP is core in the entire thing to manage the growth, otherwise we will have a quarter like second quarter where we struggled to grow?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

As you know, the first two quarters were almost entirely driven by non-par product. So, I don’t think that it is — we have to fall back on ULIP or something like that. I think it’s a very, very drastic statement to make. What I would say is that as we have said before, we will let the customer determine what he wants. And if we find that the demand is not there or demand has gone down because we are also talking to the people on the ground, we are talking to the customers. It is not as if the customers are buying it blindly or something. Our people are talking to the customers.

And when we get the feedback that there is a question of the pricing involved, then, obviously, we’ll take a calibrated look at that because we’ll have to look at the market, how we see the long-term interest rates going. All those things we will calibrate and then we’ll take a calculated call on that. But right now, if you tell me whether I believe that only ULIP can grow, I’m sorry, I don’t think that is the correct position. The other thing is, will I say that I will grow my non-par irrespective of how — what the customer wants, no, I will not do that. I will — we will try to strike a good balance between what the customer wants and what we will be able to offer. So, that is how we will try to do, create value for the customers, at the same time not actually burning a hole in our pocket.

Sanketh Godha — Spark Capital Advisors — Analyst

Got it, sir. But, sir, are you getting an incremental feedback from the customers or your branch managers or agency channels that now you need to increase the IRR because your products’ IRR looks a little — not competitive versus the bank deposit rates?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I have not received any such feedback.

Sanketh Godha — Spark Capital Advisors — Analyst

Got it, sir. And sir, couple of more questions. One question is that there was a news article or there was a diktat from the Finance Ministry that PSU banks should avoid miss-selling. So taking the statement on face value, do you think there could be some cautious approach by the State Bank of India to incrementally grow given it has come from the [ Ministry ]?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Our miss-selling ratios are the lowest in the industry, period. So, I don’t really need to think about miss-selling as one of the reasons for any reduction in growth.

Sanketh Godha — Spark Capital Advisors — Analyst

Okay. And the last one, sir. If you can tell us, at the end of nine months FY ’23, what is our hedging coverage ratio? What are the future cash flows based on persistency what you expect? How much you have hedged with all the possible instruments like forward rate agreements and PPTs today?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I think it’s too much of a futuristic kind of a….

Sanketh Godha — Spark Capital Advisors — Analyst

Sir, I’m asking current coverage ratio, sir. So today what — based on the anticipated cash flows, what is the coverage ratio you have today?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So, we have hedges — enough hedge, sufficient hedge according to our policy.

Sanketh Godha — Spark Capital Advisors — Analyst

Okay, sir. That’s it from my side. Thank you.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you.

Operator

Thank you. The next question is from the line of Neeraj Toshniwal from UBS India. Please go ahead.

Neeraj Toshniwal — UBS — Analyst

DSir, I had few questions. First is on group protection. If I look at it on sequentially, it has actually come off. Is it coming from GTI or credit life? So if you can split the growth numbers for both credit life and GTI?

Operator

I’m sorry to interrupt. But management we are unable to hear.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah, I’m sorry. Yeah, the growth is mainly from credit life.

Neeraj Toshniwal — UBS — Analyst

Okay. Can you substantiate it? How much would that be in the growth number? And GTI, we are cutting down on — the kind of mix, if you can give the numbers?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I think we’ll have to give it to you later.

Neeraj Toshniwal — UBS — Analyst

Okay. And what is the attachment rate now? Have we seen — because of the improving disbursements, has the attachment rate started moving up?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

About 50%.

Neeraj Toshniwal — UBS — Analyst

About 50%, that’s interesting. And the second question was, if I look at the data in terms of channel mix, what we have given in presentation, ULIPs are actually down on agency channel. While I was expecting that because the SBI disclosure would have picked up. So have we — any kind of KPIs we have kind of given to different channels because there is sharp improvement in ULIP from the banca channel, while on a Y-o-Y basis, there has been some decline on ULIP from the agency channel. Can we have some color on that?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

There is some kind of a difference. You know, even though we would like to believe that all the channels have a similar profile of customers, there will be some differences between channels. So that sort of accounts for it. But having said, ULIP demand as we have seen has — is already there. So if it is there in banca, it will also be there in agency. So maybe you will see it in this quarter.

Neeraj Toshniwal — UBS — Analyst

Yeah. But it has actually declined by 8% [Phonetic] on Y-o-Y. So might be last year was very strong, could be a impact of these. Okay.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I don’t think there is any specific reason for it.

Neeraj Toshniwal — UBS — Analyst

Sure. And can we substantiate the growth from other banca channels, if you can give that number?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. I think it’s 54%, we have grown in the other banks. So, that is other banks and other corporate agents.

Neeraj Toshniwal — UBS — Analyst

Are — we see any stress? Sorry?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

It’s on a lower base. It’s a 54% growth.

Neeraj Toshniwal — UBS — Analyst

Coming from a lower base, you have kind of mentioned. So is it that the other banks have been focusing more on deposits, is this the case? What we are hearing that deposit acquisition is a focus for few of the banks because we have SBI support, it’s fine.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I think I said that we are growing faster, that is by 54% in the other banks.

Neeraj Toshniwal — UBS — Analyst

Yes, that I got it. But I just wanted to understand, if there is any pressure of deposit accretion across the industry, not particularly in the banca channel.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Actually deposits, I think all the banks are now looking for deposits. But I don’t think it directly affects insurance sale because that would imply miss-selling. So, I don’t think there is any — our own ratios of miss-selling are very, very low, lowest in the market. I have already said that to the last caller.

Neeraj Toshniwal — UBS — Analyst

No, no. This wasn’t my question on miss-selling that I’m aware it’s very low, next to LIC. It’s lowest for us. The question was more on deposit accretion, nevertheless.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So there is no competition between life insurance purchasing and deposit accretion.

Neeraj Toshniwal — UBS — Analyst

Got it. Got it. And the last question is on the composite license. What are your thoughts? And if we will…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

These are exciting times where there are lot of changes happening. So, we’ll take a look at what it entails and what it means and we’ll evaluate.

Neeraj Toshniwal — UBS — Analyst

Okay. Got it. Thank you so much.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thanks.

Operator

Thank you. The next question is from the line of Dipanjan Ghosh from Citigroup. Please go ahead.

Dipanjan Ghosh — Citigroup — Analyst

Hi. Good evening. So just a few questions from my side. First is you have reported very strong growth in the individual annuities business. So just wanted to get some sense of the price sensitivity in that segment and are you seeing some pressure, especially when the market leader has been consistently raising rates?

Second, you mentioned about the new par product. So, just wanted to get some sense of the margin profile on that product compared to your other products that were there earlier?

And last, I think, on the SBI channel part, I think there have been lot of discussion in this call also. You have mentioned that your attachment rates have been going up. But let’s say, on a medium term basis, what is the strategy to increase the mining of the captive customer base that SBI is setting out there? Are you trying to deploy more manpower? Or is it just the ecosystem benefits that you want to accrue? So just wanted to get some perspective on these three parts.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. So the first point, I actually — I’m sorry, I was not able to note down. So what was the first question?

Dipanjan Ghosh — Citigroup — Analyst

The first was on the individual annuities business, so we have seen the…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. Sorry. That’s fine.

Sangramjit Sarangi — President and Chief Financial Officer

Annuities has been growing throughout the year, and we have changed the rates couple of times. But in annuities, there has been strong demand across all areas and across all channels. So annuities has been growing. It is not so much rate saver, if you ask me very frankly.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Coming to the par product, so the margins are positive. It gives us — delivers a good margin. But for any mix that we have, I think it’s always good to have — offer all the kinds of products to the customer because the traditional products, especially par products have very good role to play in both insurance and also savings build-up. So, these are very good products. So, this product is — we’ve got new features in this product. We think it will do very well. So that is as much as the par piece is concerned.

At SBI, see, what happens is that SBI has a lot of customers and insurance awareness is something which we are trying to create. And as and when we are able to create more and more awareness, more and more demand comes and we are able to do better. So, I think that is one of the things. The other thing is, of course, SBI does a lot of analytics on its data and they also come up with, who will buy what kind of thing. So, they have a very strong technology background.

Dipanjan Ghosh — Citigroup — Analyst

Sure. Can I squeeze in one more question?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah, sure. Go ahead.

Dipanjan Ghosh — Citigroup — Analyst

Sure. So just on the non-par. Let’s say, over the past few quarters, over the past 3, 4 quarters, what would be the change in, let’s say, tenure pay variant between regular or single or payout variant between lump sum income variant, I mean, or ticket sizes? I mean, if you can just give some color on — with the rising rate regime and questions on deposit mobilization, how has the customer behavior changed in terms of product constituents or product contours out there?

Sangramjit Sarangi — President and Chief Financial Officer

So the income product has taken up a significant part of the growth that we have delivered this year. And we were among later players where the pent-up demand was large. And that trend continues till now. So the income variant has more demand than the lump sum variant.

Dipanjan Ghosh — Citigroup — Analyst

But if — just wanted to get some sense. On sequential basis, have you seen any change, let’s say, over the last 60 — let’s say, 60 days to 120 days or something?

Prithesh Chaubey — Appointed Actuary

No, no. I think, what happened in the first — last day of the last financial year, we have launched income plan. We do see a lot of attraction. So income going up and then endowments both up. Last nine months, we have not seen any change in the mix between the income and endowments. So, there are different customers who are looking for the endowment and deferment [Phonetic] income. So both the needs we have provided. Only one benefit we got in this that now we have a complete foot in the non-par income side, both in income and endowment and annuity. So, I think that’s the change happened. But to be honest, last 128 days or last 10 days, we have not seen any change on this side.

Dipanjan Ghosh — Citigroup — Analyst

Okay. Sure. Thanks and all the best.

Operator

Thank you. The next question is from the line of Nidhesh from Investec. Please go ahead.

Nidhesh Jain — Investec — Analyst

Sir, thanks for the opportunity. Sir, firstly, can you talk about operating variances experienced during the first nine months on persistency and mortality?

Prithesh Chaubey — Appointed Actuary

See, we’ve — as you know, we have not disclosed this AO [Phonetic] variant for the — disclosed in the year end. So once we declare, then we will able to be comment on that. Just to give confidence to you that both the persistency — all 3 operating variance, persistency, mortality and expenses, there is a positive variance coming from. So there’s not a single operating variance where we see any challenge in term of the profitability perspective.

Nidhesh Jain — Investec — Analyst

Sure. And secondly, at the SBI Bank, how many manpower that we have deployed?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

See, I’ll tell you, we have 54,000 SBI people who are selling SBI Life products.

Nidhesh Jain — Investec — Analyst

Okay. But we don’t have any manpower supporting those.

Sangramjit Sarangi — President and Chief Financial Officer

We have.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

We have manpower. We don’t want to go into that details.

Nidhesh Jain — Investec — Analyst

Okay. And lastly, if I look at the VoNB margin book, there is a positive benefit of economic assumptions. If we look at it, as interest rate increases, our ULIP margin should come down. And since non-par is already hedged, there should not be any margin uplift. So what is giving us margin uplift because of interest rate going up in nine months?

Prithesh Chaubey — Appointed Actuary

See, there are two things happening. You see this nine month [indecipherable] move up significantly. Secondly, we do sell higher manpower product, the person we sell manpower product most [Phonetic]. Thirdly, we are able to sell the product to the customer in the growth without repricing. So we are able to optimize the interested uplift in our margin. And that’s the reason we’re getting the upside on that.

Nidhesh Jain — Investec — Analyst

I think all those things should be a part of new business profile, right? As interest rate moves up, ideally, the margin should come down.

Prithesh Chaubey — Appointed Actuary

No, it’s not necessary because in case of ULIP, you’ll get down. In non-par products or even the traditional one, you will get upside because you are guaranteed certain things and you’re getting certain results. So interest rates up, you’ll get a parity uplift in that side. Interest — ULIP, you will get a negative variance. Depending on the composition of your margins, VoNB composition, you’ll get the uplift. So we have the very parity composition coming from the non-linked products. That’s where you are seeing the parity products.

Nidhesh Jain — Investec — Analyst

Okay. Got it. Thank you, sir. Thank you. That’s it from my side.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Amit Jain from Axis Capital. Please go ahead. Amit Jain, please go ahead with your question. Your line is unmuted.

Amit Jain — Axis Capital Limited — Analyst

Can you hear me?

Operator

Yes.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes.

Amit Jain — Axis Capital Limited — Analyst

Yeah. Hi, sir. Thanks for taking my question, sir. Sir, I had a question on margin. So if we see that your new business margin for H1 was 31%, whereas for 9m it is 29.6%. So is this decline is due to some change in assumptions? Or are you seeing some margin pressure on some particular products? And for full year, will it be fair to assume that we should take like sort of 30%, 31% margin? Is it fair to assume?

Prithesh Chaubey — Appointed Actuary

No, no. See, basically, this change has happen only on account of the product mix change. So if you see the six month versus nine month, you see the ULIP proposal. And ULIP has the margin lower — lower than the company average margin. And that’s the reason we see some movement happen from the 31% to 29.6%. Those are changing assumptions.

Amit Jain — Axis Capital Limited — Analyst

Okay. And for full year, will it be fair to assume that it will be in this range, say, around 30% or so?

Prithesh Chaubey — Appointed Actuary

Yeah. Hopefully. We always keep saying there is a margin. We drive the VoNB and margin outcome. But we expect the margin will be around in range of 28% to 30%, up and here and there. So partly maybe you can assume that where margin will decline, we will be able to contain that.

Operator

The next question is from the line of Deepika Mundra from J.P. Morgan. Please go ahead.

Deepika Mundra — J.P. Morgan — Analyst

Good evening, sir. And thanks for taking my question. Sir, just on a slightly more medium-term perspective, at the product level, do you see margin expansion opportunities in specific products and which would those be?

Prithesh Chaubey — Appointed Actuary

Difficult to comment, Deepika. I think in non-par segment, depending on the customer demand, I think if you’re able to hold up, then there will be certain expansion happen. Secondly, in case we revisit our assumption and because we see improvement coming on the persistency side and also on mortality side, so there is a possibility some expansion happen.

And thirdly, which is most important that we continue to reprice the product and coming with a different segment. And if there we are able to do some particular segment with higher margins, I think we can get uplift on that side. But not specific to any — difficult to comment on any specific product, but yes, definitely product line, there will be possibility, we’re operating the margin.

Deepika Mundra — J.P. Morgan — Analyst

Understood, sir. And we’re slightly moving towards more open architecture in the industry, do you see cost of new customer acquisition going up? Or do you think that with SBI you don’t — as a majority channel, you don’t face that kind of a expense pressure?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

No. So, see, SBI being a major channel is a reality. So, I will not comment on that. But if you look at our cost structure, the way we have structured our business, both banca and agency, we have lower costs than other players. So that advantage we will hope to carry forward. The other thing is for acquisition of new customers. Now — so what happens is that if there are — there are expectations of higher payoffs from partners whom we may try to acquire or something, then we’ll have to see whether that is going to be profitable for us. So, obviously, that it will — we’ll have to take it case by case.

Deepika Mundra — J.P. Morgan — Analyst

Got it. And sir, last one on health insurance, if — any thoughts on if this is allowed for life companies, how we can leverage the opportunity?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So health and life — so the mortality, morbidity, the actuarial side of it, there are a lot of commonalities. There is a lot of synergy out there. So, that would be — that is something worth looking ahead. But then having said that, we will have to take a view looking at our business model, which is right now and then to see whether we want to have a totally different business model going forward. So, that is something which we will sort of evaluate internally. And then if such a thing, possibility comes up, then we will see what we need to do.

Deepika Mundra — J.P. Morgan — Analyst

Okay, sir. Thank you so much.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thank you.

Operator

The next question is from the line of Nischint Chawathe from Kotak. Please go ahead.

Nischint Chawathe — Kotak Securities — Analyst

Yeah. Hi. Just one question from my side. On the VoNB walk, can you just sort of call out the negative change in operating assumptions?

Prithesh Chaubey — Appointed Actuary

So just to clarify that we have not made any assumption in this period because we are showing this walk from the December ’21 to ’22. So in March, we have made the assumption changes. So the corresponding effect is reflecting this walk. And if you remember, in March, we had just made those changes on account of the reinsurance rate and the prospective. So absolutely, there is no change in any assumption for this walk.

Nischint Chawathe — Kotak Securities — Analyst

Yeah. Got it. Got it. That clarifies. Thank you.

Operator

Thank you. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.

Supratim Dutta — Ambit Capital — Analyst

Thanks for the opportunity. So, just wanted to understand on the other channels, that has declined year-on-year by around 30%. So just wanted to understand what’s happening there? And a second part to that question is, you take into — that channel includes all the non-SBI banks. And you said that has grown by around 50%. But just wanted to understand what is the strategy there to increase this APE share from 3% to 6% or 10%? If you could please help me with those two questions?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So the other bank channels — can you repeat the question, the second one?

Supratim Dutta — Ambit Capital — Analyst

Yeah. Sure. So the second one was that currently the non-SBI bank channels that is around 3% of your APE, it’s growing at 50%, but it’s still very small and you have around 10,000 to 12,000 branches. So just wanted to understand how you are looking at penetrating into that branch network?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Yeah. So, I’ll take that first. So basically, we show the potential to the bank and then we also — we do the same kind of thing that we do always. So the branch, the bank, the bank teller or the bank employee will pitch to their customers for insurance. So having — so we develop them, we develop their capabilities, we give them training, we give them the knowledge, we show them the products and we show them how — what product will be suitable for which customer.

And they go and they do the selling to the customer as they come across the counter or whichever way they would like to do that. And so the potential, as you can see, the growth is huge and that is on a smaller base. But, however, if you look at the last 2 years, we have been growing at this frenetic pace, both the years. So, there is nothing, which prevents us from continuing to grow at this kind of a rate for some more time to come till the low-hanging fruit has, so to say, is all taken up.

The first one…

Sangramjit Sarangi — President and Chief Financial Officer

So the group business is where the growth has not been very high this quarter and that will — that seems to be lumpy, group fund business. That’s why you see outside of the individual business where we are showing good growth in other channels. The group business is why the overall growth looks muted.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Yeah.

Supratim Dutta — Ambit Capital — Analyst

And if I could just ask one follow-up question to your answer on that non-SBI bank channel. So just wanted to understand, given these are banks, which are an open architecture, so you have other life insurance companies also competing. So how do you — can you impress upon that bank sellers to sell SBI Life policies and not other company policies?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So, see, we don’t tell them not to sell other bank policies or other insurer policies. That is the first thing. We show them the product which is good. We show them our miss-selling rates are the lowest. We show them that our delivery is the best. We show them the strength of the company. We have been there for 21 years and we have been — we were the first to make — start making profits. We have been continuously improving our delivery, our service and our products. That sort of really works. I mean, if you go back to the basics, you don’t need to be too cynical about it. Actually, good work on the ground will actually get you good business.

Supratim Dutta — Ambit Capital — Analyst

Got it. Thank you, sir. Thank you.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Thanks a lot.

Operator

Thank you. The next question is from the line of Pallavi Deshpande from Sameeksha Capital. Please go ahead.

Pallavi Deshpande — Sameeksha Capital — Analyst

Yes, sir. Thank you for taking my question. Just wanted to understand this. On the persistency side, we’ve seen a drop in — over the first half for the 13-month persistency. And secondly, on renewal premium growth, it seems to lag one of the large players, which has reported yesterday. So just wanted to understand the…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Which growth?

Pallavi Deshpande — Sameeksha Capital — Analyst

The renewal premium growth.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Okay.

Pallavi Deshpande — Sameeksha Capital — Analyst

The renewal premium growth is lagging HDFC Life to be specific here. So just wanted to understand what would be explaining that slower growth in renewal premium? And if it could be linked to the persistency question which I asked earlier, the 13-months persistency?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Very simply, the persistency has not fallen down. If you look at the last…

Pallavi Deshpande — Sameeksha Capital — Analyst

I’m looking at 13 months and I’m looking quarter-on-quarter.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So, see, our persistency in nine month FY ’23 was [Foreign Speech]. So it is 84 point — see, against 83.9% last year.

Pallavi Deshpande — Sameeksha Capital — Analyst

I know, sir. I’m looking quarter-on-quarter, 85.2% for the first half.

Sangramjit Sarangi — President and Chief Financial Officer

Actually, you should not look into the…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. So the behavior of each of the quarters is different. If you look at March, every time March will be higher than December or June or September. So that is how you look at it, because a lot of people end up paying up by March. There is a tendency to sort of delay the payments, but in March, it all gets crystallized. So, that is the trend that we always see.

Pallavi Deshpande — Sameeksha Capital — Analyst

Right. So at year end, we should have similar persistency on a year-on-year basis?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah, yeah. Absolutely, we would want to improve the persistency over last year.

Pallavi Deshpande — Sameeksha Capital — Analyst

Right. And sir, secondly would be on the renewal premium growth at 15% year-on-year.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So renewal premium growth, it — I don’t know about the peers. I don’t look at the peers data so much in detail. So, I really don’t know about them. But what I can say is that the renewal premium growth will depend a lot on what was sold last year. So to that extent, whatever is — whatever was sold last year, we are able to get the collection to the same efficiency that we had last year or better than that, we are happy with that. And let me tell you that we are at a better collection efficiency than last year.

Sangramjit Sarangi — President and Chief Financial Officer

So, persistency will drive renewal premium. Renewal premium is outcome of persistency. However, our endeavor is to…

Pallavi Deshpande — Sameeksha Capital — Analyst

Yeah. That’s why I linked the two questions. So, now you said about the product mix, so would it be that we’ve been increasing our share of protection and would that be also a cause for the renewal premium not to grow that fast?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

See, in protection, we would to increase the share of protection, but…

Pallavi Deshpande — Sameeksha Capital — Analyst

But renewal in protection would be lower. Basically, it’s persistency in protection lower.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Not really, not really. We have various products with various persistency, but on average, I think it all levels up.

Pallavi Deshpande — Sameeksha Capital — Analyst

Right. Thank you so much, sir.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Most welcome.

Operator

Thank you. Ladies and gentlemen, this will be the last question which is from the line of Madhukar Ladha from Nuvama Financial Services. Please go ahead.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Hello.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Hi.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

Yeah. Am I audible?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yeah. Go ahead.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

So, can I get a sense of what the back book — how much the back book surplus has grown versus the new business strain? Your surplus has grown about 50% year-over-year. And if we were to exclude the COVID impact which was there last year in the nine months and I’m looking at nine months numbers, not only for the quarter, so what would the surplus growth be if you could give that data points?

Sangramjit Sarangi — President and Chief Financial Officer

So normally, we don’t disclose this thing, but you can make a sense that we are growing faster than — compared to last year and our profit is also growing. This means our back book is generating enough surplus. That’s not only absorbing our new business — for the new business, but also helping to grow the profit as well. So, very healthy growth in — profit is coming from existing book.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

And how much is the new business strain grown by?

Sangramjit Sarangi — President and Chief Financial Officer

We don’t disclose that. We don’t disclose. But it is similar to the year as well. So sometime depending on the product mix and all, keep changing, and we don’t disclose. So, we don’t want to comment on that.

Madhukar Ladha — Nuvama Institutional Equities — Analyst

All right. Thank you. All the best.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Thank you.

Sangramjit Sarangi — President and Chief Financial Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Mahesh Kumar Sharma for closing comments.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So thank you very much, ladies and gentlemen, for a very patient hearing, for very interesting and very intelligent questions. And we hope that we have been able to answer your queries. But if there is anything for a follow-up, you can always get in touch with the company. And once again, thank you very much. Stay protected. Have a good night.

Operator

[Operator Closing Remarks]