SBI LIFE INSURANCE CO LTD (NSE:SBILIFE) Q4 FY23 Earnings Concall dated Apr. 26, 2023.
Corporate Participants:
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Prithesh Chaubey — Appointed Actuary
Analysts:
Avinash Singh — Emkay Global — Analyst
Supratim Datta — Ambit Capital — Analyst
Shyam Srinivasan — Goldman Sachs — Analyst
Madhukar Ladha — Nuvama Wealth — Analyst
Dipanjan Ghosh — Citi — Analyst
Sahej Mittal — HDFC Securities — Analyst
Sanketh Godha — Avendus Spark — Analyst
Neeraj Toshniwal — UBS India — Analyst
Akshen Thakkar — Fidelity — Analyst
Nischint Chawathe — Kotak Institutional Equities — Analyst
Sneha Sharmilee Das — Star Union Dai-ichi — Analyst
Presentation:
Operator
Good day, and welcome to the SBI Life Insurance Company Limited Earnings Conference Call. [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 Insurance. Thank you, and over to you, sir.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you very much. Good evening, everyone, and we welcome you all to the results update call of SBI Life Insurance for the year ended March 31, 2023. The 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 S. Veeraraghavan, Deputy CEO; Sangramjit Sarangi, President and CFO; Ravi Krishnamurthy, President – Ops and IT; 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.
Today’s numbers are the direct outcome of the scale, quality, and spread of SBI Life business across the regions and the fundamental requirement of maintaining high-quality consistent and sustainable business model.
Now, let me give some key highlights for the financial year 2023. New business premium registered a growth of 16% over the previous year, and stands at INR295.9 billion, leading to private market leadership. Individual new business premium stands at INR209.1 billion, with a strong growth of 27%, and private market share of 24.3%. Gross written premium stands at INR673.2 billion, with a growth of 15%. Protection new business premium grew by 19% to INR36.4 billion. Profit after tax stands at INR17.2 billion, with 14% growth over last year. Value of new business is INR50.7 billion, registering a strong growth of 37% over the INR37 billion in March 2022.
VoNB margin is at 30.1%, with an improvement of 420 bps over 25.9% in March 2022. Embedded value stands at INR460.4 billion, registering a growth of 16% over the INR396.3 billion in March 2022. Embedded value operating earnings stands at INR90.5 billion, and operating return on embedded value stands at 22.8%. Assets under management grew by 15% to INR3.07 trillion. Robust solvency ratio of 2.15 against the regulatory requirement of 1.5.
I will now update you on each of these elements in detail. So, let me start with the premium. Individual new business premium has grown to INR209.1 billion with Y-o-Y growth of 27%. Single premium contribution is 30% of individual new business premium, which is mainly attributed to growth in our individual annuity product. The Company gained private market share by 92 basis points to 24.3%. On individual rated, rated new business premium stand to INR152.2 billion, with a growth of 18% over the previous year, while maintaining our leadership position with private market share of 22.3%. Group new business premium stands at INR86.8 billion, with a share of 29% in new business premium. We have collected total new business premium of INR295.9 billion, registering private market share of 21.3%, but renewal premium grew by 13% to INR377.3 billion, which accounts for 56% of the gross written premium.
To sum up, gross written premium stands at INR673.2 billion with a Y-o-Y growth of 15%. In terms of APE, premium stands at INR168.1 billion [Phonetic], registering a growth of 18%, out of which Individual APE stands at INR153.8 billion [Phonetic] with a growth of 19%. Total 21.98 lakh new policies were issued, and registered a growth of 14% over the previous year. Since 2010, the Company has maintained its leadership position in number of policies issued, and consistently delivered year-on-year growth for the last 10 years. This reflects the clear goal of the Company to increase the penetration and achieve holistic growth.
Individual new business sum assured registered a growth of 13% over the corresponding last year, as compared to growth of 12% at private industry level. Let me give you details about the product mix. As on March ’23, our guaranteed non-par savings products are contributing 18% of individual new business. And on individual APE basis, this comes to 24%. Non-par guaranteed products new business has registered Y-o-Y growth 116%, mainly due to the new business contribution of Smart Platina Plus of INR27.35 billion in the year ending 31st March, 2023.
Individual ULIP new business premium is at INR111.4 billion, which now constitutes 3% of the individual new business premium. Individual protection new business premium is at INR10.10 billion, registering a Y-o-Y growth of 6%. Group protection stands at INR26.4 billion with a growth of 25%. Credit Life new business premium has grown 23%, stands at INR20.7 billion.
On APE basis, protection contributes 11% of new business and registered growth of 16%. Annuity business is at INR49.7 billion and contributes 17% of new business premium. Under annuity, the Company is offering immediate as well as deferred — deferment option. Individual annuity business is growing at 134% over last year. This is mainly due to the new business contribution of Smart Annuity Plus of INR38.1 billion. Total annuity and pension new business underwritten by the Company is at INR84.2 billion, registering a growth of 16% over the same period last year.
In terms of the distribution partners, with strength of more than 58,000 CIFs, SBI and RRB bancassurance business contributes a share of 67% and grew by 31% in individual new business premium. And on individual APE basis, it stands at INR104.2 billion with a growth of 19.3%. Agency, one of the strongest channels, registered new business premium growth of 19% and contributes 19% in the new business premium. Agency channel individual APE stands at INR42.3 billion, with a growth of 15%. As of March 31, 2023, the total number of agents stands at 2,08,774, a growth of 43% over the previous year. During the year, the Company added a net of 62,717 Agents.
During the year ended 31st March, 2023, other channels, including direct, corporate agents, brokers online and web aggregators grew by 45% in terms of individual new business premium and 32% in individual APE. Protection new business premium through other channel registered growth of 25%. Partnerships like Indian Bank, UCO Bank, South Indian Bank, Punjab & Sind Bank and Yes Bank registered a growth of 26% in individual new business premium. These partnerships have contributed 3% of the individual new business premium. During last quarter, we signed corporate agency agreement with Karur Vysya Bank. We are confident that these partnerships will further enable us to expand the insurance market across the country.
On profitability, the Company’s profit after tax for the year ended March 31, 2023, stands at INR17.2 billion with 14% growth Y-o-Y. In the month of March, the Company had declared and paid an interim dividend of INR2.5 per share. Our solvency ratio remains strong at 215% as on March 31, 2023. We are happy to share that we have more than doubled the VoNB span of three years. Value of new business is INR50.7 billion, with growth of 37% as against INR37 billion in the last year.
VoNB margin is at 30.1% for the year ended March 31, 2023, as against 25.9% in the previous year, showing an improvement of 420 basis points. Growth in VoNB and VoNB margin is driven by product — a change in product mix, predominantly in the non-par segment. Embedded value stands at INR460.4 billion, a growth of 16% over the previous year. With our growth target and the product mix shift, we expect to maintain the healthy and sustainable VoNB growth rate.
Operational efficiency, our opex ratio stands at 5.1% for the year ended 31st March, 2023. Our total cost ratio stands at 9.6% for the year ended 31st March, 2023. With respect to persistency of individual regular premium and limited premium paying policy, 13-month persistency stands at 85.5%. Company has registered a significant improvement in the 37-month and 61st month Persistency by 236 basis points and 612 basis points, respectively.
As mentioned in my opening remarks, assets under management stands at INR3.07 trillion as on March 31, 2023, having a growth of 15% as compared to March 31, 2022. The Company continues its efficient usage of technology for simplification of process with 99% of individual proposals being submitted digitally, 45% of individual proposals are processed through our automated underwriting.
To conclude, 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 networks, 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 evolving insurance sector company, as well as other industry players are in line with the regulator’s vision of increasing penetration and offering insurance to all.
The Company is committed to enhancing the digital experiences of customers, distributors and employees and offer right products to the customers. Further, we will 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 with 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 — Emkay Global — Analyst
Yeah, hi. Good evening. Great set of performance, I mean, strong numbers all across. Couple of questions. The first one is more around the growth outlook for FY ’24, considering what has happened or what is happening around the regulatory front or tax front and how your sort of a quarter four has gone by, so — because if I recall correctly, last year, we started with a strong growth momentum, but growth to other end has slowed. So, in this backdrop, some kind of a directionally the growth and margin trajectory for FY ’24, again, I am not going to see quarter-on-quarter. That’s one.
Second is, again, more around your key distribution channel, that’s SBI. So, now, with all sort of regulatory changes happening, particularly on the commission front and all, so the some kind of a doubt or question in mind about exclusivity of the channel and also the kind of any sort of a place around payouts, if at all that has sort of a impact on either growth or margin trajectory? Thank you. These are my two questions.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah, thank you very much, Avinash. So, the growth outlook, if you ask me, we expect what we were expecting last year, so the growth will continue and we will have a 20% to 25% growth this year also. So, we ended up with slightly less than 20%, but then, that is largely on the back of various other factors. But if you ask me, the outlook remains similar because the demand is there. Insurance is a product which needs to be distributed and with all the regulatory changes, I think it will become easier to create better products, distribute them across, and with all these regulations, which the commission regulation changes that you have, all these things will lead to creatively designed products which can be beneficial for both the customer and the distributor, and obviously for the Company, because that ensures sustainability. So, we look to continue the trend of growth.
And as far as the commission payouts, etc., are concerned, we will definitely be looking at all our distribution partners, and how we can increase the distribution of insurance products. The regulator has a vision of insurance for all by 2047, but then the aspiration is that it should happen before that. And to do that, we need to actually expand the market. You will notice that we are probably one of the few companies which is actually selling more number of policies. So NOPs, if you look at the NOP growth, we have a very healthy NOP growth at 14%, and I don’t believe anybody else has got a strong NOP growth, it’s all mostly like. So, in the industry if you see, we are the ones which is growing the NOP.
And on top of that, if you look at the kind of products that we are distributing, and the principle behind our distribution, we keep the customer at the center, and therefore anything that will be value-accretive for the customer, which will be the guiding principle for us as always. The customer has to like the product, he has to need the product, and then, we’ll be distributing that. So, obviously every distributor will have expectations of some good returns for the distribution that they do, but then, what we would like to see is that the value that we create for distributors who actually sell products with — need-based products to the right kind of customers with more persistency, where value is created for the customer as well as for the Company. So, there, we may look at some kind of a new creative products which can then share a higher amount with some of the distributors. So that is something which we believe we will be definitely looking at, with the new flexibility that are available to us.
Avinash Singh — Emkay Global — Analyst
Okay, sir. So, I mean, SBI and SBI Life relationship premiums as it is?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Well I — what I would like to say is that, like I said, we will design products that will be good for the customer and which can be distributed well, and there if we see that the value is increasing, and we are able to penetrate the market much faster, then, obviously, distributors will also be rewarded, without losing the customers’ value proposition.
Avinash Singh — Emkay Global — Analyst
Okay. Okay. Thank you.
Operator
Thank you. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.
Supratim Datta — Ambit Capital — Analyst
Thank you for the opportunity. So, I’d like to start off on the protection side. So, your individual protection overall for the year has grown, for the quarter four it seems like it has declined slightly compared to PCP. So, could you tell us what’s going on there because the other peers appear to be reporting a strong growth on the retail protection side. So, just wanted to understand what’s happening with SBI Life.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah. So, our protection has been growing year-on-year. So, every year we have grown, so this time we have grown 6% for the year. Yeah, you are right, quarter four we have seen a slight decrease about 5%, but then, if you look at the general mood around the last quarter, so I think there was a little bit of talk — more talk about tax and things like that, and therefore, there were some of the things that did not sell as much as the others. The focus definitely is around what is happening around people’s minds, the customer should be thinking about it, but we feel that going forward, protection being one of the areas which we feel is a very good product for the customer. So, we will continue to have our focus on protection and that it’s a win-win for everybody. The customer gets maximum protection for the minimum outlay, and we also — the value that it gives to the Company is also good. So, therefore protection focus will be there going forward. It’s a good customer value proposition.
Supratim Datta — Ambit Capital — Analyst
Got it. A second question from my side. So, SBI, as it can be seen from the numbers, hasn’t really benefited from the high ticket size policy demand, which gives you a much cleaner base in FY ’24, but from the government’s perspective, it looks like we are also moving away from a old tax regime to a new tax regime, which will have — has no deductions. So, could you let us know what proportion of your customers will really be benefiting from the ATC benefit, and what could be the impact if that goes away?
Prithesh Chaubey — Appointed Actuary
Sir, we don’t know about how many customers are claiming ATC. Our only anecdotal thing is, the seasonality of the insurance business is coming down every year. So, ATC according to us is not such a big driver of insurance business as compared to past.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah. So, one of the other things is that, earlier there were only a few instruments which actually gave the ATC benefit. So, that was the time when people used to either go for a NSC or an insurance policy, but I think now the people are realizing the need for insurance and most of the people who buy insurance are people who want to buy insurance. So, more and more — I mean more and more you’ll see people buying insurance because they want insurance, and may feel the need for insurance, and not to save taxes. And in any case, there are many avenues for ATC savings, but insurance is a unique product which gives — it is the only product which gives you insurance.
Supratim Datta — Ambit Capital — Analyst
Got it. And last point, one data-keeping question, could you let us know within your ULIPs product basket, how many people have a premium or ticket size of more than INR2.5 lakh, and how many will be lower than INR2.5 lakh?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
So, right now, we don’t have the information. I mean, I can’t give you the information at this point. So, I’ll let this pass.
Supratim Datta — Ambit Capital — Analyst
Sure.
Operator
Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan — Goldman Sachs — Analyst
Yeah. Good evening, and thank you for taking my questions. Just the first one on ULIPs in general, two parts to it. [Indecipherable] any growth for ULIP this fiscal year, and I’m looking at alternative channels as well, which is either banca, agency, others, we have seen a decline to all. So, our significance of ULIP in our overall AP has also come down. So, just want to understand the thought process around ULIP being our top product, and how should we look at it for next year?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
So, ULIP is — continues to be a very good product offering that we have. We have a very wide choice of products and if you see, it’s flattish. At best if you see, it’s not really a decline or something like that. It is rather flattish. But then, you will also see that we have some other product offerings which we didn’t have earlier, like, for example, the Smart Platina Plus. That has got very good traction last year. So, the emphasis especially from some of the customer side, given that the markets have not been setting things on fire, has been towards some kind of guaranteed products, and the COVID effect is also there. A lot of people were worried about the future and so they would rather go for guaranteed products. So, really speaking, it’s not a very large shift.
But, yeah, there is a significant shift that we can see, that is because we have these other products also. So, the product range that we have, overall, we have a growth in our business, and it’s only a question of interface. There has been some shifting here or there, but ULIP continues to be strong and going forward, I don’t see that ULIP will lose its relevance or something. It is a very good product. These are very good products that we have for various segments, and therefore, probably this year we should see some growth in ULIP as well as, of course, the strong growth in other products.
Shyam Srinivasan — Goldman Sachs — Analyst
Got it, sir. And my second question just is on the — now the VNB margin at 30%. Can you comment a little bit about the ULIP margins as well, where are they tracking up, and do we have further levers for margin expansion for next year, given that we have not seen any growth in this product? So how should we think about margins for next year?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Margins, we feel that margins are a question of what the — like I said, the customer value proposition. So, really speaking, the margins are, you can take margins only up to a particular point. And that is as far as the margin growth is concerned. So, we expect margins to be around these levels. We’ve been saying this for some time now. So, it could be 29%, it could be 30%. I’m really not bothered about that, because as far as — as long as my VNB is actually growing, value of new business is growing, as far as my EV is growing, I’m not really bothered about the exact number that comes out there. To the question about ULIP, we have a significant positive margin for ULIPs, and we will continue to sell ULIP profitably, and also give a good value proposition to the customers.
Shyam Srinivasan — Goldman Sachs — Analyst
Okay, sir. And last question, just I will be very quick about it. ULIPs you typically had like a debt-to-equity ratio of 52%, 48% kind of percent. In this whole changes related to debt, mutual funds, indexation going away, does this value proposition of the way we have used to sell our product, does that change going forward?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
See our — what we have noticed is that our equity-to-debt in terms of ULIPs has actually increased. So, we used to have a 60% debt, 40% ULIP equity kind of thing. Now, we are more like 52%, 48% in terms of equity to debt. So, I think it’s — there may be some changes here, there, depending on the time, exact time when if the rates are going up or down, or the markets are performing better or not. But given that we are giving very strong long-term returns on all our products in ULIP, I think the equity story is definitely likely to continue for some time.
Shyam Srinivasan — Goldman Sachs — Analyst
Got it, sir. Thank you and all the best.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Madhukar Ladha from Nuvama Wealth. Please go ahead.
Madhukar Ladha — Nuvama Wealth — Analyst
Hi, good evening. Thank you for taking my question. Sir, I see on a quarter-over-quarter basis, there is a lot of volatility in the product mix. So, for example, the share of ULIP was about 51% in Q2, which went to about 65%, and it’s back to about 52% in Q4. What exactly sort of has played out? Is it by design that you operate in a certain way or — I mean, just wanted to understand better as to how you do your planning and what sort of products are actually — how sales is actually generated?
And second, I know that this question has been sort of asked before, but do you have any broad product mix in mind, and or are there any sort of limitations as to how much non-par you can sell? So, that would help us understand what sort of product mix we should be modeling and where margins could actually come up at.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah, you said it right. It’s an old question. I’ll answer your second question first. It’s an old question and I’ll give you an old answer, that we sell according to the customer’s need, and not what we want to sell. So sometimes ULIP will be in demand, sometimes non-par guaranteed will be in demand. And as you will see, the proportions are largely within a particular kind of range. And as we have said earlier, our non-par pickup was mainly on the back of a product which we didn’t have in the portfolio, which we introduced last year — year before last, in fact in March, and actually worked very well for our customers. So, that would be one of the things which you can see.
ULIP like I said, is a very good basket of products that we have, and these products will find favor with people who are aware of the financial markets, people who are looking for good returns, and we have given good returns in the past. And therefore, that demand is going to be there. We have a plan overall for the year and it has played out largely according to our plan.
So, coming back to your volatility, so that is the whole thing. That is why the volatility that you may see a little bit of ULIP selling more here or there. So, it will depend a lot seasonally, geographically, depending on where people are having the demand, where people get the money, where people are thinking of doing their investments along with the insurance. We should not forget the insurance proposition in all these products. So, that insurance need is right and then there is a savings element along with it, and whichever way they want to take it, we are there to provide these products because we have all these products. Right now, we don’t have any limitation to the amount of what we will sell, so the non-par, I don’t think I have a number limit on how much I’m going to sell non-par.
Madhukar Ladha — Nuvama Wealth — Analyst
Understood. And you mentioned that you’re targeting 20%, 25% APE growth. Would you say that your VNB would also track that kind of a growth number?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Obviously. VNB is definitely a product of volume, one of the things is volume, one of the things is the product mix. So, obviously, VNB is going to be there.
Madhukar Ladha — Nuvama Wealth — Analyst
All right. All the best.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Dipanjan Ghosh — Citi — Analyst
Hi. Good evening. Few questions from my side. First, if you could just break up the investment variance number into the sub parts for the year? Second, if I look at your real-world assumptions over the last few years as a percentage of your investments, it seems that from FY 2021 onwards, it has increased a bit, so just wanted to get some idea of how confident are you on some of these assumption. And lastly, on your non-SBI Banca partnerships, if you can give some color on the counter share that you have across some of this open architecture partners and how do you intend to scale those partnerships up over medium-term?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah, so non-Banca, I’ll take your last question first. As far as the non-SBI partners are concerned, they are growing. The bases are smaller, but the growth is good. The need is there. The customers are there. And they are the ones who need insurance and if they have not bought insurance earlier, obviously, this is the time to sell insurance to them. And I think a lot of the partners are also feeling the need to provide all the financial services to their customers, and this is an opportunity for them to increase their stickiness also and also to provide a customer with the need, which otherwise you would have to satisfy from some other stable. So, that is likely to grow and continue to grow and we would also like to have new partnerships as we have already said. We are taking in new partners and we are doing pretty well in terms of the existing partnerships that we have. And we will continue to grow those partnerships, especially because the customers are there, they need the products. So, that is the answer to your third question. Now, coming back to one and two, I’ll request Prithesh to give you a color on those numbers.
Prithesh Chaubey — Appointed Actuary
Sure. So on your other question, when you are referring to the real-world scenario, basically, you’re looking to the unwinding rate. I think which is, unwinding rate is basically expected to have a portfolio, it’s a portfolio weighted yields, which is a function of basically composition of the — your portfolio and yield curve. So, if you look into that, in the recent three years what you are referring to, we are moving, our competition is also moving towards the non-par business, so there is a mix coming in, which is longer durations, and you’ve also seen the yield curve is also going up.
As a result, you see the expected unwinding yield has gone up. But if you see — if you compare, it’s not a significant change, so ’21, we are having 7.85%, last year 8.17%, this year 8.60%. You see the composition is coming — increasing and the — so the yield curve. So, we are very sure that what we are assuming, these are things, this is no assumptions coming, it’s your actual portfolio, actual yield curve and your locked in it, so there is no assumption that we need to be worried about.
Coming back to the — your economic variance, I think you’re referring to, which is around 2,418 [Phonetic], I think in my view, it should — if we are not showing economic variance, I think you should be asking more questions. If we are showing lesser, you should be asking more questions because it’s a reality. If you see today, there is a lot of economic volatility and this economic volatility really reflecting to the — resulting into this economic variance. Nothing — we should not worry about those things. We should worry more about the ALM aspects and cash flow making prospect.
Dipanjan Ghosh — Citi — Analyst
So just one small follow-up on the second question. Just wanted to get some idea on whether you have changed your expected equity return assumptions for the back book.
Prithesh Chaubey — Appointed Actuary
No, no, no, nothing.
Dipanjan Ghosh — Citi — Analyst
Okay. Sure. Thanks and all the best.
Prithesh Chaubey — Appointed Actuary
Thanks.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you.
Operator
Thank you. We have the next question from the line of Sahej Mittal from HDFC Securities. Please go ahead.
Sahej Mittal — HDFC Securities — Analyst
Hi. Good evening. So, one of the questions is on the VoNB margins. So, based on result, what is this [Technical Issues].
Operator
Sorry to interrupt, but there’s a lot of disturbance from your line.
Sahej Mittal — HDFC Securities — Analyst
Is it better now?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
No, no.
Operator
Sir, we’re still getting a lot of disturbance. We can’t hear you clearly.
Sahej Mittal — HDFC Securities — Analyst
I’ll join back in the queue.
Operator
Yeah. Thank you.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
[Foreign Speech]
Operator
The next question will be from the line of Sanketh Godha from Avendus Spark. Please go ahead.
Sanketh Godha — Avendus Spark — Analyst
Thank you for the opportunity. It was reflected in 1H numbers too, also in FY ’23. But our EV sensitivity to the interest rate seems to have gone up because that number in FY ’22 was less than 2%. Today, it is 4% — closer to 4%. And if I look along also the economic variance number, which is almost 6% of the opening EV, which for others who have put in the numbers is less than 4%. Sir, just wanted to understand, it seems that we have — SBI Life as a company has become more sensitive to the macro environment compared to the peers. Is it to do anything with respect to the hedging strategy what we are using or something we need to read in between these numbers, basically?
Prithesh Chaubey — Appointed Actuary
I think economic variance, I’ve already explained. This sensitivity which increase is happening only on account of the network. So, if you see that, we have the network, and our network is –there is no corresponding liability, so you see the sensitivity is going up. You also look into that, we are writing some more non-par orders as compared to ULIP [Phonetic] things. Now what has happened in non-par is you reserve — your reserving measure we have and your best estimate liability and then you have the excess assets. So, this excess assets will have some volatility in the income of the interest rate.
And also, you rightly said that we are having the par. So, our objective is to do the cash flow matching, which is a real-world matching, thus we try to do that. In that process, you do hedging and then you get some economic higher interest rate sensitivity. So, I would — just to give a comfort to you that because it is a product of two things. One is that you try to do as much as close hedging in the real world, so that our economic balance sheet and real balance sheet should not get impacted. And secondly, instead of the excess network, which is not having liability that is giving some of the sort of higher sensitivity. So there is no — we should not be worried about the asset liability matching, it’s very perfectly matched, and liability is adequately provided for.
Sanketh Godha — Avendus Spark — Analyst
Sir, just a follow-up to it because the network issue was even there in FY ’22, but the sensitivity was just 2%. It has almost doubled in the current year. Actually, the concern comes from there. And I understand that network doesn’t have any liabilities and they are exposed and the market impacts those investments. But given the number has doubled compared to the last year, so — and on a bigger base, so that’s the reason I was just trying to understand.
Prithesh Chaubey — Appointed Actuary
So, let me explain other thing. What’s happened, you look into those both the part, one is the portfolio mix. So, in non-par portfolio, when you are writing non-par portfolio, you are having the reserving requirement more than unit-linked because unit-linked your asset equal to liability and you are having — you need not do any excess asset in your book. In case of non-par distributing products, you keep excess assets to manage those strategy liability. As this excess assets that we are keeping as a part of strategic balance sheet, this giving higher sensitivity, nothing else. So this is a function of two things.
Sanketh Godha — Avendus Spark — Analyst
Sir, can you quantify that excess assets in the non-par book, how much portion we have?
Prithesh Chaubey — Appointed Actuary
See, what has happened is — it is not because what’s happened there is a best estimate liability. There is a requirement that you work out the — you put some prudence. So, if we’re writing high margin product, you have to have additional prudence and then there is a regulatory requirement you need to [Indecipherable] and other aspects. So, difficult to quantify, so I’m not going to quantify that.
Sanketh Godha — Avendus Spark — Analyst
Got it, sir. And the last one on margin. As you know, as you guys do that, that every fourth quarter, you change the assumptions with respect to operations. So, that led to 80 bps improvement in the margin. So, I just wanted to understand this 80 bps, what was the biggest contributing factor, whether it was opex or persistency or something else which led to that additional benefit?
Prithesh Chaubey — Appointed Actuary
So, it is a mix of all. What’s happened, if you see this in all operating fronts, that you can see that my economic EV or AUM, we make them operating variance in all the fronts, be it mortality, be it expenses as is. What we did that is a mix. So we — some part of those, we have capitalized. So, in this 80 basis point, there is some element of the expenses, some element of the persistency, and some element coming from the reinsurance side because we get a better term on the reinsurance, that we have included there. So, that’s the reason we get 80 basis point of a new business.
Sanketh Godha — Avendus Spark — Analyst
Got it, sir. And last one. See, we reported 30% margin based on 22% non-par mix. So, sir, is it fair to assume that going ahead, not to significantly deviate from our margin guidance, is the non-par contribution to remain in this range, or are you expecting it to come down or go up if demand picks up? I know you answered this question, sir, but just wanted to understand that still we try to tackle the business so that non-par will continue to contribute around 22% plus kind of a number?
Prithesh Chaubey — Appointed Actuary
I understand your anxiety to understand the whole way the margin will go up or remain the same or whatever, but we don’t have a magic crystal ball to see that thing. What I have said still stands. We will sell the products which the customers want. These are products which the customers really seem to like. The ULIP products, the non-par guaranteed products that we have, we have some very good protection products, that ULIP [Phonetic] products. So, the mix will change slightly here, there. And I am not going to be able to guarantee to you that this will be at some particular percentage or the other. So, if that will answer your question.
Sanketh Godha — Avendus Spark — Analyst
Okay, sir. Thank you. That’s it from my side.
Prithesh Chaubey — Appointed Actuary
Thank you.
Operator
Thank you. The next question is from the line of Neeraj Toshniwal from UBS India. Please go ahead.
Neeraj Toshniwal — UBS India — Analyst
Hi sir. In the opening remarks, you mentioned that you must be 20% or you are shy of 20% APE growth because of some factors beyond your control. Wanted to know what were those factors and how confident we are on delivering 20%, 25% for the coming year, or for the FY ’24 rather?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
See, I can’t point out a single factor or anything. There are many multiple things that have been taking place. So, as a Company, we try to grow, and if you can see my agency force. My agency force has increased a lot this year and we are, like, if you ask me, there are a lot of development things that we are doing, and based on that, we feel that going forward, we will be able to achieve this 20% to 25% that we are looking for.
Neeraj Toshniwal — UBS India — Analyst
This is payment, sir. My question is more into the strategy because the bank growth has been very, very weak if I look at the numbers. Our banca focus has been on the deposits, or how should one think about it? Because obviously if you — quarter four last year also it was weaker, but this time on a lower base also it is a weak outcome. So, anything to read there?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
So, I look at the business as a whole year kind of thing. There are seasonal variations, there are variations geographically and all. I wouldn’t read too much into all these. 19% growth is very strong. I think on the kind of base that we have, a 19% growth, and then to keep a margin of 30.1% on the value of new business, and to grow new business, VNB by how much is it, 37%?
Prithesh Chaubey — Appointed Actuary
37%.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
37% and the EV by 14%, I think all these things are a very good indicator of growth. I mean I can always look at a particular one week or something and say that the business was not there, or went up or down or whatever. March is one of those things that you will see, but there is growth in March, and it’s a minor point here or there. It’s been probably not as spectacular as we have been able to grow earlier, but then, that is also a factor of what happened last year. So, the growth over March last year, so the March was good. Then, obviously, we don’t expect spectacular growth over that all the time. But overall, I would still say that my own idea is that we — with all the things that we are doing in the Company, we should be seeing 20% to 25% growth.
Neeraj Toshniwal — UBS India — Analyst
Got it. And on interest rate sensitivity, coming back to that, how much would this have been coming from Group savings, because that wouldn’t have been properly, or might not be hedged as close to non-par saving business what we do. So, any color on that?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Which one?
Neeraj Toshniwal — UBS India — Analyst
On interest rate sensitivity, wanted to know what has been the contribution or higher sensitivity coming from Group savings business?
Prithesh Chaubey — Appointed Actuary
Like Mahesh said, I think the — we don’t look at the [Indecipherable] line of business, right. So basically our objective is to look into in totality, so you have a balance sheet, total balance sheet, not a segmental thing, and we try to manage that. So in Group particularly, when you are referring to, we closely match our asset to the liability, and there is not much sensitivity coming from.
Neeraj Toshniwal — UBS India — Analyst
Got it. And on the Credit Life, do we have the numbers handy? How much would have been the share of Credit Life within the Group?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yes. That I can give you. Credit Life…
Neeraj Toshniwal — UBS India — Analyst
In terms of APE?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
INR200 crore APE.
Neeraj Toshniwal — UBS India — Analyst
And what’s corresponding last year? Same number?
Prithesh Chaubey — Appointed Actuary
Full year, you want full year numbers right. So, last year was INR1,600 crore, INR1,700 crore roughly. This year it is INR2,000 crore. This is not rated. So, rated you take one-tenth.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yes, 10%.
Prithesh Chaubey — Appointed Actuary
This is for full financial year.
Neeraj Toshniwal — UBS India — Analyst
Okay. I was actually asking for Q4, not the whole.
Prithesh Chaubey — Appointed Actuary
Q4 is INR54 crore — so INR540 crores last year, and INR620 crores current year. That is FY ’23.
Neeraj Toshniwal — UBS India — Analyst
Got it. Got it. Thank you, sir.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah. Thank you.
Operator
Thank you. The next question is from the line of Akshen Thakkar from Fidelity. Please go ahead.
Akshen Thakkar — Fidelity — Analyst
Congratulations, sir, on concluding a great year. Just two follow-ups to the comments that you made earlier. One was around the growth. Could you just — you always targeted that high growth, but could you just help us understand what are the products, what are the channels that makes you hopeful for achieving the 20%, 25% growth that you outlined? That was one.
And second was, to the question on relationship with the SBI Bank, you did make a comment that you are sort of nimble to looking at new products which could be a win-win both for the customer, and also for the channel partners, but I just wanted to understand from SBI Life P&L or margin point of view, if you do these products or terms of trade with SBI were to change, one concern that investors do carry is that, does that land up impacting your VNB margins? Those two questions from my side, sir. Thank you.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
So, one of the things which I always say is that, the whole idea of doing business is that it should be beneficial to the customer and the stakeholders. So, if you keep that in mind, then I think you’ll get your answer out there. We will make sure that the customer gets a good value proposition, and distributors are rewarded well for the kind of good selling that they will do. If they get good customers, if they get good persistency, if they get a good product mix, which then gives us a good margin, obviously, the distributor also gets a good proportion of that.
And as far as channels for growth are concerned, like I said, we have very strong channels. So, three channels that are very strong now are SBI, agency and other banks. Other banks is on a smaller base, but they are likely to grow very well because the customers definitely need all the products that we have. Agency, as I said, we have — today, we have — we are ending with March with 2,08,000 plus agents. And this is an increase of over 62,000 agents over last year. And when these agents are developed and activated and they will be activated over a period of time.
Some of them have become active, some of them will become active over time, and they will be more and more productive. We have one of the most productive sale — agency sales forces in the country. So, in the private sector, we have the most productive agency, and therefore, these are the — and of course, SBI as a channel, so we have the potential out there. There are a number of customers who need to be covered with insurance. So, going forward, I don’t see any dearth of avenues for growth.
Akshen Thakkar — Fidelity — Analyst
All right. Thank you, sir.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead.
Nischint Chawathe — Kotak Institutional Equities — Analyst
Thanks for taking my question. I’m looking at your average policy term and I believe on the non-par side, your average policy term is closer to around 27-odd years for the last four quarters as compared to around 19, 20 in the previous year. So, what would be the reason for this? And do we expect this to sort of sustain?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
So, when you see, this is a product change, so you have more of traditional non-par guaranteed. This is a longer-term product, so you…
Prithesh Chaubey — Appointed Actuary
It’s a out period, so earlier it was endowment where one-time [Technical Issues] getting paid. Now, it is getting paid or spread or…
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah. So, we have a product which goes, you pay 10 years and then after — from the 11th year or 25 years you’ll get returns, so overall it becomes a 35-year product.
Nischint Chawathe — Kotak Institutional Equities — Analyst
And the margins between both the products would be substantially different?
Prithesh Chaubey — Appointed Actuary
No, no.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Margins are…
Prithesh Chaubey — Appointed Actuary
Similar to the, I think, this is probably the income variant of the endowment. So, earlier, we are having only income endowment variant. Now, we have won the income variant, which is selling more. And margin is, you can see the margin because we are selling more proposals coming from this product and we’re growing the margin, so margin is similar to the both the variants.
Nischint Chawathe — Kotak Institutional Equities — Analyst
Incrementally, do you see a challenge in kind of hedging this product as this kind of [Speech Overlap]?
Prithesh Chaubey — Appointed Actuary
Not at all because we restrict to the premium paying term matched to the 10 year and most of this is coming from 7 to 10 years. So, that prospective is easily getting its hedging, so we don’t see any challenge on that prospect.
Nischint Chawathe — Kotak Institutional Equities — Analyst
Got it. Thank you very much.
Prithesh Chaubey — Appointed Actuary
Thank you.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Sneha from Star Union Dai-ichi. Please go ahead. Sneha, the line for you is unmuted. You may go ahead with your question.
Sneha Sharmilee Das — Star Union Dai-ichi — Analyst
Hello?
Operator
Yes, go ahead.
Sneha Sharmilee Das — Star Union Dai-ichi — Analyst
How do you see the overall on the distribution, so which are the focus area we’re planning to grow more over there, bancassurance and for other parameters, could you guide us?
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yeah. So, I think I already answered this question before and maybe you were not there on the call. What we have done is, we have more than 208,000 agents today. And this is an increase of 62,000 agents this year. So that is one of the things that we are doing. And the other is, of course, in SBI and the other banks, so we have a good number of customers out there who still need insurance. So, these are the main channels around which we will be selling. Obviously, we’ll be selling some people directly online and through other channel partners.
Sneha Sharmilee Das — Star Union Dai-ichi — Analyst
Okay. Got it, sir. Thank you.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yes. Thank you.
Operator
Thank you. Ladies and gentlemen, that would be our last question for today. I would now like to hand the conference over to Mr. Mahesh Kumar Sharma for closing comments. Over to you, sir.
Mahesh Kumar Sharma — Managing Director & Chief Executive Officer
Yes. Thank you very much. In fact, thanks to all the participants on the call who have given us this — given us so many insights and given us the feedback and also asked very relevant questions. And we hope that all of you have a very good time investing and stay safe and have a good evening. Thank you very much.
Operator
[Operator Closing Remarks]