Directors Report of SBI Life Insurance Company Ltd.
Mar 31, 2023
The Directors are pleased to present the 23rd Annual Report of SBI Life Insurance Company Limited ("SBI Lifeâ or "the Companyâ) along with the audited financial statements for the financial year ended March 31, 2023.
1. Financial Performance and State of Companys Affairs
The Company witnessed a growth and consistent performance in FY 2023. The key parameters of the Company are as follows:
|
(Rs. in Billion) |
||
|
Business Performance |
FY 2023 |
FY 2022 |
|
Gross Written Premium (GWP) |
673.16 |
587.60 |
|
- New Business Premium (NBP) |
295.89 |
254.57 |
|
- Renewal Premium (RP) |
377.27 |
333.02 |
|
Annualised Premium Equivalent (APE) |
168.15 |
142.98 |
|
Individual Rated Premium (IRP) |
152.19 |
128.72 |
|
Total Protection NBP (Individual Group) |
36.36 |
30.52 |
The Company has maintained its private market leadership in Individual Rated Premium with 22.3% private market share. The Gross Written Premium (GWP) has increased by 15% to '' 673.16 billion due to increase in New Business Premium (NBP) by 16% to '' 295.89 billion and Renewal Premium by 13% to '' 377.27 billion.
Individual Rated premium (IRP) has increased by 18% to '' 152.19 billion and APE has increased by 18% to '' 168.15 billion. The Protection New Business Premium has increased by 19% to '' 36.36 billion due to increase in credit life business by 23%.
|
(Rs. in Billion) |
||
|
Profitability and Financial Performance |
FY 2023 |
FY 2022 |
|
Assets under Management (AUM) |
3,073.39 |
2,674.09 |
|
Net worth |
130.16 |
116.21 |
|
Indian Embedded Value (IEV) |
460.44 |
396.25 |
|
Value of New Business (VoNB) |
50.67 |
37.04 |
|
New Business Margin (VoNB Margin) |
30.1% |
25.9% |
|
Profit/(Loss) after taxation (PAT) |
17.21 |
15.06 |
|
Earnings per equity share (EPS) Basic/Diluted |
17.19/17.18 |
15.06/15.04 |
⢠Assets under Management grew by 15% '' 3.1 trillion with debt-equity mix of 71:29.
⢠The Company''s profit after tax has increased by 14% to '' 17.21 billion
⢠Indian Embedded Value stands at '' 460.44 billion with growth of 16%
⢠Value of New Business grew by 37% to '' 50.67 billion leading to an increase in value of new business margin from 25.9% to 30.1%.
|
Key ratios |
FY 2023 |
FY 2022 |
|
Operating expense ratio |
5.1% |
5.1% |
|
Commission ratio$ |
4.5% |
3.7% |
|
Total cost ratio* |
9.6% |
8.8% |
|
Claim Settlement ratio (Individual) |
97.05% |
97.05% |
|
Solvency ratio |
2.15 |
2.05 |
|
Persistency ratio (premium basis)A |
||
|
13th month |
85.52% |
85.18% |
|
37th month |
74.51% |
72.15% |
|
61st month |
55.60% |
49.48% |
|
Return on equity |
14.0% |
13.7% |
^Commission ratio = Commission (including rewards)/Gross Written Premium (GWP)
*Total Cost = Operating expenses Commission Provision for doubtful debt Bad debts written off Persistency ratio based on regular premium/limited premium payment under I ndividual category
⢠The operating expense ratio (Operating Expense to GWP) stands at 5.1%.
⢠The commission ratio has increased from 3.7% to 4.5% mainly due to increase in commission on first year premium and single premium.
⢠Individual death claim settlement ratio stands at 97.05%
⢠Solvency ratio of the Company stands at 2.15 as against the regulatory requirement of 1.50 indicating the strong and stable financial health of the Company.
⢠13th month persistency ratio stands at 85.52%. Further, the 37th month and 61st month persistency (based on premium considering Regular Premium/ Limited Premium payment under individual category) has shown strong growth by 236 bps and 612 bps respectively due to our focus on improving the quality of business and customer retention.
⢠Return on equity has increased from 13.7% to 14.0%.
The robust distribution network is key to success of the Company which ensures that products and services provided by the Company reaches target customers in the cost-efficient manner. The Company aims at targeting underpenetrated market through expansion of its distribution reach by opening up of new offices, quality recruitments and new business partnerships.
As at March 31, 2023, the Company has 992 offices, 2,08,774 Insurance Advisors (IAs) and 58,723 Certified Insurance Facilitators (CIFs) across the country.
During the year, the Company has collected New Business Premium of '' 295.89 billion, comprising of '' 178.30 billion from ''Bancassurance'' which represents company''s largest distribution network, '' 54.89 billion from Retail Agency and '' 62.69 billion from other distribution channel which includes direct sales, sales by corporate agents, brokers, micro agents, common service centres (CSC), insurance marketing firms (IMFs) and Web aggregators.
The Company''s direct sales primarily comprise sale of group products, as well as standardised individual products sold through online offerings.
2. Industry and Company Outlook
The world outlook has changed significantly since 2021.
After navigating the COVID-19 pandemic, the global
economy faces several challenges including continuing
supply chain bottlenecks, the Ukraine-Russia conflict, an
energy crisis and high inflation.
As per Swiss Re report, India is one of the fastest growing insurance markets in the world, and it is estimated to be the sixth largest by 2032. Further, it is estimated that total insurance premiums will grow on average by 14% annually in nominal local currency terms (9% per annum in real terms) over the next decade.
The recent regulatory developments and digitalisation should support insurance market sector growth. A series of regulations are being introduced to improve insurance penetration, increase capital inflow, improve valuation, and facilitate the entry of small, specialised and niche players.
Reinvention will be a central strategic driver for insurers and there will be growing opportunities to expand portfolio across health and wealth protection products, leading to further industry convergence. Prevention-oriented products and services will become increasingly popular for insurers.
The key areas on which insurers need focus as they prepare for the future:
⢠Grow and innovate by reimagining the role of insurance in customers'' lives, as well as the technology needed to serve them wherever they are.
⢠Modernise technology to streamline legacy systems and transform claims and underwriting.
⢠Invest in the future workforce by optimising talent, planning for new ways of working and using human and machine capabilities for the best result.
⢠Imagine the metaverse and how that can transform the way insurance companies run their internal processes and engage with their clients.
⢠Promote sustainability across every aspect of the business.
In coming years, the insurance industry will be poised for strong growth owing to the positive changes in the macroeconomy and competitive dynamics. The most crucial change may be changes in customer behaviours and technological landscape. The Company is well positioned to capitalise on the emerging opportunities, backed by a favourable regulatory environment and government policy support in order to increase the insurance penetration with the help of its expansive and robust distribution network.
Regulatory update:IRDAI (Payment of Commission) Regulations, 2023
Commission includes remuneration, reward by whatever name called paid by an Insurer to an Insurance Agent, Intermediary, Insurance Intermediary as applicable.
IRDAI removed the maximum commission limits specified in the erstwhile regulations.
The Regulations prescribed that the total amount of commission payable shall not exceed the EoM limits
specified under IRDAI (Expense of Management of Insurers transacting Life Insurance Business) Regulation, 2023.
IRDAI (Expenses of Management of Insurers transacting Life Insurance Business) Regulations,2023
"Expenses of Managementâ includes (i) all expenses in the nature of operating expenses of life insurance business, (ii) commission to insurance agents, and intermediaries'' /insurance intermediaries, and (iii) commission and expenses on inward reinsurance (which are charged to Revenue Account). The definition excludes any charges, such as GST.
The EOM Regulations provides that the expenses of management (EOM) should not exceed the limits specified in respect of various segments of business during a financial year. IRDAI has allowed an Insurer to incur "Additional Allowable Expensesâ over and above the EOM limit towards:
⢠Expenses incurred towards Rural sector, PMJJBY and other schemes notified, up to 15% of the incremental premium over the previous year
⢠Insurance Awareness and Insure-tech expenses
⢠Head office expenses for Indian insurers having branch outside India or having International Financial Service Centre Insurance (IFSC) or Insurance Office (IIO).
The Company is required to monitor expenses of management of the Participating policies on an overall or aggregate basis. Where the Company has exceeded the overall limits of expenses of management, excess of such expenses shall be borne by the Shareholders.
Further, the Company is required to monitor expenses of management of Non-participating and Linked policies on overall or aggregated basis, the excess of such expenses shall be borne by the shareholders.
Board approved business plan to be put in place specifying projected capital requirement, solvency margin and expenditure projections.
Use & file (U&F) procedure for life insurance products & riders
IRDAI expanded the scope of Use & File procedure for Life Insurance product allowing launch of new products from allowing certain specified modifications previously.
Board approved Product Management Committee (PMC) to be constituted which shall review and approve the products/rider in line with Board Approved Products Management & Pricing Policy, under Use & File procedure.
IRDAI has specified category wise conditions for filling new products/riders under Use & File along with procedures for modifying existing products and riders
This amendment will facilitate industry in responding faster to the emerging needs, in terms of designing and pricing of Insurance Products.
Revision of premium rates of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Revised enrolment and claim forms for PMJJBY and PMSBY
Department of Financial Services, Ministry of Finance has revised the premium rates of PMJJ BY scheme from '' 330 per annum to '' 436 per annum.
The Company conducts experience analysis (including death due to Covid) on regular basis to monitor the emerging experience and undertakes various measures in order to mitigate any potential risks arising out of the experience.
4. Dividend & Dividend Distribution Policy
The Board of Directors of the Company at its meeting held on March 8, 2023 has declared an interim dividend of '' 2.50 per equity share with face value of '' 10 each (previous year ended March 31, 2022, interim dividend of '' 2.00 per equity share with face value of '' 10 each). The total interim dividend pay-out amounts to '' 2.50 billion. No final dividend is recommended for the year ended March 31, 2023 and the said interim dividend declared is to be confirmed as final dividend.
In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulationsâ) the Dividend Distribution Policy of the Company is disclosed on the website https://www.sbilife.co.in/en/ about-us/investor-relations
The Company has uploaded the details of unpaid and unclaimed dividend on the Company''s website: https:// www.sbilife.co.in/en/about-us/investor-relations
During the year there was no fresh capital infusion by the promoter in the Company. The authorised share capital and paid up share capital of the Company stands at '' 20.00 billion and '' 10.01 billion respectively. The shareholding pattern during the year under review is in compliance with the statutory requirement. The shareholding pattern is provided as a part of Form No. MGT-9 which is annexed to this Report and under Schedule - 5A which forms part of the Financial Statement.
During the year, the Company has allotted 5,24,197 Equity shares on exercise of certain stock options granted under SBI Life Employees Stock Option Scheme 2018 (''the Scheme'' or ''ESOS 2018'').
During the year under review, the Company has not accepted any deposits from the public as per Section 73
of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
The Company has received various awards during the year across brand management, technology, CSR initiatives etc. Brief highlight of some of the major awards are mentioned below:
⢠Gold Award in Environment Protection Initiative of the Year at Integrated Health & Wellness (IHW) Annual Awards
⢠Golden Peacock Awards for Risk Management
⢠Silver Honour for Multichannel Marketing Category for ''Papa Hai Na: Sumit ke Papa campaign'' at Adgully DIGIXX Awards 2022
⢠Silver Honour for Financial Immunity Survey 2.0 at Adgully DATAMATIX Awards 2022
⢠Most Innovative Risk Management Strategy of the Year and Risk Management Team of the Year (Runner-up) at 4th CRO Leadership Summit and Awards 2022
⢠Most Trusted Private Life Insurance Company of the Year at 2nd edition of Navabharat BFSI Conclave and Awards 2022
⢠Overall Achievement (Life Insurance) and Highest Growth (Life Insurance) by ASSOCHAM 14th Global Insurance Summit and Awards 2022
⢠Gold Medal- Team of the Year and Silver Medal- Best Induction Training Program at TISS LEAPVAULT CLO Awards 2022
⢠Amiable Insurer in Life Insurance-Large Category at The Economic Times Insurance Summit
⢠Best Life Insurance Company of the Year'' (1st Runner Up) and Best Strategies for Insurance Spreading (2nd Runner Up) at 3rd Emerging Asia Conclave & Awards 2021
As we work to deliver performance with purpose, we are proud that numerous organisations have recognised our efforts and achievements. These awards demonstrate the Company''s commitment to achieve excellence, across all spheres of its activities and operations.
SBI Life has a wide range of products catering to various customer needs in the life, health, pension & microinsurance segments. These products are customer centric, simple to understand and have competitive features.
To maintain its competitive edge in the market, the Company has reviewed and modified following existing products (individual and group) during the financial year 2022-23:
1. SBI Life - Smart Swadhan Plus
2. SBI Life - New Smart Samriddhi
3. SBI Life - Smart Annuity Plus
4. SBI Life - Swarna Jeevan Plus
5. SBI Life - Saral Jeevan Bima
6. SBI Life - Smart Platina Plus
7. SBI Life - Saral Pension
The product SBI Life - Smart Swadhan Plus and SBI Life - Saral Jeevan Bima were modified to add new distribution channel.
The product SBI Life - New Smart Samriddhi was modified to increase the range of sum assured offered, reduce the minimum entry age and to pass on the benefit of current economic scenario to customers by enhancing the benefits under the product.
The products, SBI Life - Smart Annuity Plus, SBI Life -Swarna Jeevan Plus, the standard Individual Immediate annuity product SBI Life -Saral Pension and SBI Life -Smart Platina Plus were mainly modified in view of the changing interest rate scenario.
The Company also launched five new products considering the business requirement
The following new products were launched during the financial year 2022-23:
1. SBI Life - Smart Annuity Plus
2. SBI Life - Retire Smart Plus
3. SBI Life - Smart Lifetime Saver
4. SBI Life - Group Micro Shield - SP
5. SBI Life - Group Micro Shield
SBI Life Smart Annuity Plus is an Individual, Non-linked, Non-Participating general annuity product, offers immediate/deferred annuities to individual(s), who wish to purchase annuity through product conversion or who wish to get regular income throughout their lifetime.
SBI Life Retire Smart Plus is an Individual, Unit Linked, Non-Participating pension savings product, offers range of fund options.
SBI Life - Smart Lifetime Saver is an individual, Non-Linked, Participating (PAR) Whole of Life Insurance savings product, offers guaranteed and non-guaranteed benefits throughout the term of the policy.
SBI Life - Group Micro Shield - SP and SBI Life - Group Micro Shield are Non-linked, Non-participating, long term and one-year renewable Group term micro life insurance products respectively.
9. Customer and Partner Service Enablement for business growth
The Company strives continuously to achieve and reach new heights of performance by bringing new ideas with an intention to improve, customise and stay relevant. Therefore, in the present digital world, it is very essential to empower both, the company and its stakeholders digitally.
Focus on building robust work systems, continual process improvements and thrust on digitisation and automation continues with an aim to enhancing customer experience, improving efficiencies, reducing costs and maximise value creation to all stakeholders.
The technologies like Artificial Intelligence (AI) and Machine Learning (ML) have helped in the implementation of automation of tasks which have large amount of data and are repetitive in nature. This has helped reduce the time in processing of activities and helped in reducing manual work.
The Company has also played its part in preservation of the environment by sourcing 99% of its Individual applications and processing ~ 49% of its servicing requests digitally thereby reducing paper use and our overall carbon footprint.
These process improvements and efficiencies developed have been benchmarked and have stood tall against the industry best practices. Our winning of some of the most reputed performance excellence awards including the Indian Merchant Chamber''s Ramkrishna Bajaj National Quality Award 2022, the recognition of 5 of our processes as best practices in the IMC MQH Best Practices competition 2022 and winning of the Golden Peacock innovative service trophy for the surrender prevention tool are an acknowledgement of the progress made. Further, all of our Central and branch operations are ISO 9001:2015 certified.
The details of major activities undertaken by various departments are highlighted below:
⢠Growing Capacity and Process Efficiency
We are happy to report that, in the year under review, your company has been able to handle significant transaction volumes with utmost efficiency.
During the year, 21.97 Lakhs Individual Policies were issued with an increase of 14%
Lives covered under Group Insurance Products as below:
⢠During the year, 1.84 crores lives covered under Group insurance policies with an increase of 35%.
⢠As on March 31, 2023, the total active lives for servicing under all Group products has reached 4.36 crores with an increase of ~ 26% in active lives over FY 22.
⢠Under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), we ended FY 2023 by covering over 1.53 crore new lives and increasing the total active lives covered to more than 3.42 crore.
Renewal Premium of '' 37,727 Cr has been collected in FY 2023 registering a growth of 13% over FY 2022. Individual renewal business contributes 96.5% of the total renewal business.
Benefits net of reinsurance is '' 30,090 Cr in FY 2023.
13.58 Lakh incoming telephonic interactions and
19.59 Lakh customer queries were handled.
⢠Customer Engagement, Retention & Persistency management
The financial strength and stability of an Insurance Company lies in the strength of its renewals. Improvement in collection reflects our customers'' trust on our Brand. Higher Customer retention leads to continued growth & profitability.
It gives an insight into what the customer feels about the product, the company and its services rendered. This is also an important parameter in assessing the persistency. This also gives the company a view of how long the customer might stay with the company and keep on paying their premiums regularly.
All three key facets which help improve customer stickiness, loyalty and persistency are focused upon
⢠Customer Engagement
⢠Renewal collections and persistency
⢠Controlling exits through surrender and lapse control
We have taken various measures to ensure a longterm relationship with customers and mechanisms devised to enhance the Customers'' overall experience and engagement such as personalised product videos, ongoing engagement calls, enhanced customer communication through various communication system, awareness campaign etc.
Retention of policies needs to be tracked continuously and very closely with an aim to prevent exits at all stages. Policies which are not getting paid on the due date or within the grace period and policies which are moving into lapsed status on account of non-payment of premium are very important from a customer retention perspective. The customer retention is ensured by implementing lapsation control and surrender prevention measures through revival campaign, customer awareness campaign.
Customer Support & Service Delivery
The customer support and service delivery is ensured via optimised touchpoints such as customer contact care, self-service channels, smart care customer portal, WhatsApp service, Chabot, intermediaries assisted services etc.
In an era with little differentiation in terms of product offerings, we have been able to use our efficiency and simplified claims processes to effectively differentiate our services from the competitors.
Owing to the continual process improvements, we have been able to register a total claim settlement ratio of 98.39% (against 97.20% in FY 22). Individual claim settlement ratio stands at 97.05%.
During the year, we have launched the Bima Sahayak program, an initiative aimed at assisting our claimants in getting their claims settled in the minimum possible time without requiring to submit multiple requirements. This initiative has been recognized as a best practice by the Indian Merchant Chamber under their MQH Best Practices competition 2022.
⢠Process Quality Excellence & Risk Mitigation
Robust Quality assurance framework has been put in place to monitor the quality of data and processes across the spectrum of functions and transactional systems to ensure accuracy and mitigate operational risks.
⢠Monitor key financial transactions to ensure correctness of payments and prevent financial loss due to data errors and/or application logic gaps
⢠Monitor other key operational processes for quality and consistency of execution and generate proactive alerts about gaps found
⢠Monitor accuracy of automated processes in the Policy Management System (PMS)
⢠Develop automated and tech tools to improve the efficiency, effectiveness and scalability of the quality monitoring processes
⢠Monitoring Framework to continuously monitor the correctness, integrity and consistency of data and records generated by the core policy management system and the peripheral transactional systems.
Improvement of the effectiveness and efficiency of the grievance redressal mechanism has been a constant focus of the Company along with an endeavour to ensure approachability and quick, fair, equitable & satisfactory resolution of customer queries and complaints.
Despite a significant increase of over 14.26% in the number of new policies issued in FY 2023, the ratio of customer grievances to issuance has been maintained at levels which are amongst the best in the industry. For FY 2023 it stood at 0.20%, a marginal increase of 0.01% over FY 2022.
Many steps to empower the employees and improve the Query/Complaint handling skills thus enabling
them to provide efficient and effective resolutions have been taken in the year. The key initiatives are:
⢠Constantly upgrading our Portals and Digital Tools for Customer Relationship Management (CRM) such as CRM Next to improve our processes
⢠A web-based, real-time integration of Parivartan Module with our CRM Next Module has also been established.
⢠Integration of CRM Module with the SBI CRM
⢠Integration of CRM with Bima Bharosa Portal
⢠Onboarding Revamping of Insta PIV
Insta PIV has been enhanced to include a new user interface incorporating multiple features such as audio - voice over, face detection and Liveliness check, Proximity to camera, Product Benefit & customer''s Personal description, option to enter dis-agreement comments on important screens, consent of the customer is recorded in every screen, Interactive PDFs are available in 14 languages etc.
Increased adoption of e Insurance Accounts (eIA)
Dematerialisation of policies is beneficial to both the customer and organisation. The customer is able to get quick access to their policy document on their fingertips without having to wait for the actual physical delivery of their document. The Company has popularised this digital initiative and has increased eIA adoption from12.96% in FY 2022 to 60.93% in FY 2023.
⢠Payout Processing Integration of Payout Modules
Several policy payouts were integrated into the systems to ensure smooth and faster settlements with efficiency and accuracy. This has helped us to manage increased volumes. Also, enhancements were done in the existing payout systems to ensure better risk mitigation.
As per the recent trends, FY23 has seen major enhancements in the digital footprints and improved agility in the IT landscape. Some of the highlights include the Voice BOT for renewal calling, Robotic Process Automation (RPA), end point posture checks for Virtual Desktop Infrastructure (VDI) & Virtual Private Network (VPN) and augmented capacity of compute, storage and bandwidth to support ever growing business volumes.
The improved digital tools and intuitive popularised have played a significant role in enhancing the experience of, both, our internal and external customers. We have progressively enhanced the capacity and capabilities of our technology infrastructure that has consistently improved the availability of systems and applications for the business.
Some of the improvements implemented during the year under review are listed below:
A. Infrastructure⢠Wide Area Network (WAN)
SD-WAN technology implementation has been started to replace tradition WAN connectivity with software defined WAN technology to reap benefit of new WAN technology to extend best application performance to branch users. This will also help in adoption of cloud in future.
⢠Security Initiativesa. Secu rity Operation Centre (SOC):
During the year the company have further strengthened the existing, state of art, SOC to monitor 24x7 all critical IT devices, websites, mobile applications and other domains, owned or used by the company.
SOC monitors all applications and related infrastructure devices for security alerts - technology based on machine learning/ artificial intelligence, data analytics, threat intelligence, anticipation and analytics with threat hunting, network behaviour and user behaviour. SOC has the capability to quickly identify and detect cyber threats.
Brand protection services for Internet facing websites, mobile application and social media handles are in operation. Dark Web is monitored for SBI Life contents with Intelligence Feed and action based on Incident.
Deception & decoy technology is providing a layer of protection to stop attackers who have penetrated the network level up to traps (decoy) IT asset
b. Database Activity Monitoring (DAM):
DAM is implemented in all the databases to monitor the access and the queries that executed by the users/applications.
Source code review tool is implemented and integration with development team end systems carried out to ensure the codes moved to production are without any code level vulnerabilities.
d. Mobile Device Management (MDM):
Upgraded Unified Access Gateway environment for enhanced protection for
Mobile devices and application hosted over MDM
Data Classification tool is implemented to classify the files with appropriate label as per data governance policy.
f. Endpoint Protection and Remediation:
Antivirus, extended detection and response, website whitelist and device control policies are configured to safe guard company information asset.
Integrated all IT systems clock with Cert-in NTP clock server for having uniform time synchronism as per Cert-in guidelines.
The company built strong and dedicated-email infrastructure with multi-mode of access such as webmail, client and mobile app. upgradation of the email system to the newest version has improved the security posture, speed of operations and provide improved features to end users.
⢠Customer Relationship Management (CRM) system: "CRM Nextâ is the core system providing 360-degree view of the customer, leading to better service across all touch-points. The application is upgraded to the latest version to take advantage of the additional features and led to improved customer service.
⢠Aadhaar Masking Integration with all applications as per UIDAI and IRDAI regulations: In order to ensure the compliance with IRDA regulations, an ''AI'' based Aadhaar number masking solution has been implemented and integrated with all the applications through which KYC documents are being collected.
⢠Services for Digital Assignment - IRDAI Sandbox: The Company participated in a digital assignment project for loan offerings from other financial institutes against the company policies in partnering with CAMS.
⢠Outbound Voice BOT for renewal calling:
An AI based voice BOT has been introduced in FY23 for calling customers for renewal premium payment due reminders and the calling dispositions are updated in CRM for further follow-ups. The BOT also enables the customers to get a call back from the Contact Centre, in case the customers need any further assistance in paying their premium.
⢠Account Aggregator Services: Financial data aggregation is crucial to providing the best customer experience and service possible. Financial data aggregators provide the ability to provide more personalised services to the customers, fostering a more comprehensive and convenient system. The Company has successfully gone live in utilizing financial information from other financial institutes as FIU (Financial Information User) and providing financial information to other entities as FIP (Financial Information Provider)
⢠WhatsApp BOT: In l ine with journey of increased offerings on WhatsApp, a WhatsApp BOT for intermediaries has been introduced in this financial year to get real time updates on on-boarding statuses, pending requirements, etc.
The existing functionalities such as campaign for policy servicing and customer engagement has been further enhanced.
⢠Bank Account Verification of customers:
Using penny drop service, the bank account details of the customer are verified during on-boarding and while doing payout. This is to ensure that the correct details are available for policy payouts.
⢠Surrender Retention tool: To help the frontline staff deal with queries on the policy fund growth and prevent surrender of the policy, a tool has been implemented. The tool provides the illustration with benefits that customer will gain by continuing the policy.
⢠Online Integration of eIA Account:
e-Insurance Account number generation is provided on a real-time basis thus improving the TAT of processes linked to it.
⢠QR code reader for death certificate: This functionality is to scan the QR code available on the death certificates to verify the details that are mentioned on the death certificate. The functionality is made available in the image viewer application for the users to view the details that are fetched using the QR code scanner on real-time basis.
⢠TPA Integration: Real time intimation to TPA for various medicals to be conducted for respective clients through API based integration with TPA This helps in reducing the medical TAT.
⢠Integration of early death claim model:
Improved Risk score version implemented in the New Business work flow for better risk management.
⢠Robotic Process Automation, (RPA):
Utilisation of latest technology and solutions is an ongoing process to improve efficiency and efficacy. 380 tasks have been automated. We will continue to automate more processes in the coming years.
Continuing the thrust from the previous year to adopt ''Go Digital'', more than 99% of the Individual New Proposals are sourced through our Mobile Application - mConnect. Additional feature ''Account Aggregator'' has been integrated with mConnect App to get account statement from respective banks during the proposal sourcing journey
⢠Digital offering for our partners/distributors
We have a ready set of digital platform bouquet including mobility and API (Application Program Interface) and it has been made available for quick integration and on-boarding of partners for new business and renewal premiums.
C. Business Intelligence and Reporting
The Company has various reporting and analytics platforms for strategic decision making and actionable for a wide range of users for real time activity tracking, repository and dashboard viewing etc. During the year following are the key implementations.
⢠Re-trained Cross sell/Up sell Propensity model
⢠Re-trained Surrender & persistency models
⢠Real-time customer risk scoring based on industry benchmarks
⢠Real-time processing of fraudulent claim investigation model
To bring resilience to the company, especially after Covid, initiatives were taken to support the applications and to ensure continuity
⢠Upgraded Application Programme Interface (API) platform to latest technology for robust security, performance boost and scalability.
⢠Space management automated in all databases were ensured a minimum of 20% additional space to make them more resilient.
⢠Centralised application monitoring system along with dashboards has been setup to provide high visibility of any untoward incident that may lead to disruption of services. This has provided in-depth analysis and helped resolve before incidents take place.
Initiated automation projects for quality assurance/ testing of the applications to help reduce the TAT in testing.
Equity markets gave good returns for the year amidst increased volatility across both domestic and international markets. Nifty was flat in FY 23 and gave a mild negative return of 0.6% for the year. Uncertainty in equity markets came with Federal Reserve rate hikes, massive inflation in developed markets, banking sector crises in US and Eurozone and some declining growth fundamentals as well. Higher imports as a result global crude oil, and commodity prices that shot up due to the Russia-Ukraine War and weaker exports growth amidst slowing growth in the DM regions widened the current account deficit. INR weakened by 8% to 82.18 owing to a stronger dollar as the Federal Reserve continued on its path of monetary tightening hiking by 500 bps.
Yield on 10-year Government of India Bond rose by 48 bps in the year from 6.83% to 7.31%. Markets reacted to the monetary policy tightening by RBI of around 250 bps amidst rising inflation and steady growth. The 10 Y bond yield touched 7.6% in the first half of FY 23, but yields later eased with policy tightening coming to an end, and oil price eased from $115//bbl in May 2022 to $80/bbl by December 2022.
The Assets under Management (AuM) of the Company has increased by 15% from '' 2,674.09 billion as on March 31, 2022 to '' 3,073.39 billion as at March 31, 2023. The debt equity mix of the AuM as on March 31, 2023 is 71:29.
The AuM was made up of '' 1440.83 billion of traditional funds (including shareholders'') and '' 1,632.56 billion of unit linked funds. The unit linked portfolio majorly comprises of equity funds, bond funds and NAV guaranteed funds.
Persistency is a critical indicator of business viability and brand success. During the FY 2023, the Company has witnessed 13% growth in Renewal Premium collection at '' 377.27 billion, which contributed to 56% of Gross Written Premium. The Company has continued to focus on renewals and has undertaken initiatives to improve persistency of its existing policies. The collection efficiency has helped improve the 13th month regular premium persistency to 85.52% and the 61st month regular premium persistency to 55.60% for Individual policies thus establishing the efficacy of our customer engagement and retention interventions. The independent Renewal Vertical is focusing on collection of renewal premiums and servicing policyholders. We shall continue to accord prime importance to this area.
SBI Life is one of the most trusted private Life insurance brand with more than 22 years of operations. SBI Life family has grown from 18,515 employees as on March 31, 2022 to 20,787 employees as on March 31, 2023 which depicts a growth of 12%. While the average age of employees is 36 years 6 months, the average tenure is 5 years 2 months.
In terms of Section 136(1) of Companies Act, 2013 the Report and the Accounts are sent to the Members excluding the statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement containing aforesaid details may be obtained by the Members by writing to the Company Secretary at the Registered Office of the Company.
14. Employees Stock Option Scheme
The SBI Life Employee Stock Option Plan 2018 (''ESOP 2018'') and SBI Life Employees Stock Option Scheme 2018 (''the Scheme'' or ''ESOS 2018'') has been approved by the shareholders of the Company in the Annual General Meeting (AGM) held on September 27, 2018 based on the recommendation of the Board Nomination & Remuneration Committee (''NRC'') and Board of Directors (''Board'') in their meetings held on August 31, 2018.
The maximum number of stock options granted to eligible employees in accordance with ESOP 2018 shall not exceed 30,000,000 shares. During any one year, no Employee shall be granted Options equal to or exceeding 1% of the issued share capital of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by way of special resolution in a General Meeting. Further, the maximum number of Options in aggregate granted to an employee under this Plan shall not exceed 1,00,00,000 Options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and provided in the letter of grant.
During the year ended March 31, 2023 the NRC in its meeting held on July 27, 2022 has approved the grant of 7,80,140 Employee Stock Options (''Options'') to the eligible employees under ESOS 2018.
No employee was granted options during one year amounting to five percent or more of options granted during that year. Similarly, no employee was granted options during any one year, equal to or exceeding one percent of the issued capital of the Company at the time of grant.
During the year ended March 31, 2023, the Company has not granted any loan to its employees for purchasing shares of the Company.
The Scheme is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. Further, there are no changes in the scheme. The disclosures pursuant to the SEBI SBEB Regulations have been placed on website of the Company at https://www.sbilife.co.in/en/about-us/investor-relations.
The disclosures pursuant to SEBI SBEB Regulations, Guidance Note on accounting for employee share based payments, disclosure of diluted EPS in accordance with ''Accounting Standard 20 - Earnings Per Share'' issued by ICAI or any other relevant accounting standard have been disclosed in the Notes to Accounts which form part of financial statements in the Annual Report.
15. Prevention of Sexual Harassment of Women at the Workplace
The Company has an Internal Complaints Committee (ICC) to investigate and inquire into sexual harassment complaints in line with The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has in place a policy for Prevention of Sexual Harassment, which purports the Company''s zero-tolerance towards any form of prejudice, gender bias and sexual harassment at the workplace.
During the FY 2022-23, the Company had undertaken training on e-Shiksha empowered, our digital platform, on awareness and sensitisation with respect to sexual harassment at workplace. The Company organised workshop and awareness program for the members of ICC to equip them for effectively dealing with investigation, inquiry and disciplinary proceedings in connection with sexual harassment complaints as per policy and also to develop skills necessary for enquiries and documentation procedures while dealing with such cases. Further, the Company''s Policy on Prevention of Sexual Harassment of Women at Workplace along with the details of Internal Complaints Committee at each Region is accessible to all employees on the Company''s intranet, e-bandhan.
During the year FY 2022-23, 8 sexual harassment cases were filed. All 8 cases were disposed-off during the year and appropriate actions were taken within timelines in FY 2022-23. Having an adept POSH policy has enabled us in employer branding by creating employee value proposition, permeating a sense of safety amongst employees, retaining vital talent and promoting inclusively.
The details are mentioned in the Business Responsibility and Sustainability Report, which is hosted on the Company''s web-link: https://www.sbilife.co.in/en/about-us/investor-relations.
SBI Life has implemented Corporate Governance and risk culture by which the company is directed and controlled in the interest of shareholders and other stakeholders to sustain and enhance the value. Risk management at SBI Life is an integral part of the responsibilities
of management and covers all aspects, including strategic planning. Risk Strategy and Risk Vision of the Company is outlined in the Risk Management Policy. The Risk Management policy specifies the process for identification, assessment, and analysis of the Company''s risk exposures; develop risk management strategies and its monitoring.
Risk appetite statements at the corporate level are reviewed and monitored by the Risk Management Committee of the Board. Further assessment of Key Risks of the Company is conducted annually and submitted to the Risk Management Committee of the Board for review.
SBI Life has robust risk management framework which includes Operational Risk Management, Fraud Monitoring, Data Governance, Information Security, Business Continuity and Regional Risk Unit to drive the enhanced risk culture across the organisation.
The Company also carries out an ICAAP (Internal Capital Adequacy Assessment Process) activity, which details the assessment of material risks, estimation of capital requirement and adequacy for maintaining solvency requirements.
Risk Management at SBI Life is certified/aligned with the following ISO Standards:
1. Enterprise Risk Management - ISO 31000:2018 (Statement of Compliance)
2. Business Continuity Management System (BCMS) -ISO 22301:2019 (Certified)
3. Information Security Management System (ISMS) -ISO 27001:2013 (Certified)
Sound risk management practices and business continuity management practises followed by the Company enables it to continue core business operations at an acceptable level in case of any crisis scenario.
SBI Life Risk Management has won the following accolades and awards:
1. ''Golden Peacock Award for Risk Management for the year 2021.'' This is the third time that the Company has won this prestigious award.
2. ''Most Innovative Risk Management Strategy of the Yearâ award at 4th CRO Leadership Summit and Awards, 2022.
3. "CRO of the Yearâ award at 4th CRO Leadership Summit and Awards, 2022.
4. ''Recognition'' under the category of "Risk Management Team of the Yearâ at 4th CRO Leadership Summit and Awards, 2022.
More information on the risk management practices adopted by the Company is available in the ''Enterprise Risk Management'' section appended to this report and ''Management Report'' section of the Annual report.
17. Internal Audit and Compliance Framework Internal Audit:
The Company has in place a robust internal audit framework. The Inspection and Audit (I & A) Department undertakes risk based audit approach and it commensurate with the nature of the business and the size of its operations. The internal audit plan covers Information System Audit, different process audit as well as transaction based audits at the Head office, Regional Offices and across various branches of the Company.
The audits are carried out by the internal audit team of the Company and also by the outsourced audit firms. The approach of the audit is to verify compliance with the regulatory, operational and system related controls. Key audit observation and recommendations are reported to the Board Audit Committee of the Company. Implementation of the recommendations is actively monitored.
I & A has designed Offsite Monitoring System (OMS) with an objective to identify deviations at an early stage and sharing the same with concerned process owners for immediate corrective action. Exception reports are developed and operational for around 90 scenarios. The frequency to extract and analyse a particular set of data through these exception reports is based on the criticality of the process. Frequency is defined as Quarterly, half yearly and yearly. The OMS review enables the process owners to identify gaps, if any, at an early stage, ensuring timely resolution of the issues. The utility is also shared with the users for a proactive and real time assessment at user level, itself.
The branch inspection checklist was rationalised to match with the scope of current roles of Branches. The policy transactions with critical functions such as New Business Quality is reviewed at quarterly frequency, underwriting process and policy service transactions are reviewed at half yearly frequency, through offsite data analytics.
In accordance with Insurance Regulatory and Development Authority of India (Investment) Regulations, the Company has also engaged professional chartered accountants firm to carry out concurrent audit of investment operation as per IRDAI investment regulations/guidelines and guidance note on Internal/ Concurrent Audit of Investment functions of Insurance Companies, issued by the Institute of Chartered Accountants of India. Any significant findings in the concurrent audit are presented to the Audit Committee and reviewed by Board Investment Sub-Committee and Board Investment Committee.
The Board Audit Committee of the Company has laid down governing principles to oversee the compliance framework of the Company. The Committee discusses the level of compliance in the Company and any associated
risks and reports the same to the Board. The Company has also formulated various internal policies and procedures to define framework for the working of various functions to ensure compliance. The Compliance function identifies and communicates regulatory requirements to relevant functions in a timely manner and monitors critical compliance risks based on suitable monitoring mechanism. The Compliance function works in liaison with the regulators and provides clarifications to various functions on applicable laws, regulations and circulars issued by the regulatory authorities. A compliance certificate signed by the Managing Director & CEO is placed at the Board Audit Committee on a quarterly basis.
The Company has also formulated various internal policies and procedures relating to working of various functions to ensure compliance.
18. Internal Financial Controls
The Companies Act, 2013 requires the Board of Directors, to lay down adequate and effective internal financial controls with reference to the Financial Statements and include it in the Board report. The Company has aligned its internal financial control system with the requirements of the Companies Act 2013, on lines of globally accepted risk based framework as issued by Committee of Sponsoring Organizations (COSO). The internal control framework is intended to increase transparency and accountability in an organization''s process of designing and implementing a system of internal control. The framework requires the Company to identify and analyse risks and manage appropriate responses. The key components of the internal financial control framework include:
Entity Level Controls (ELCs) operates at an organisation level. The Company has defined a set of entity level policies and controls. The ELCs set up by the Company includes various policies and procedure in place such as Anti Money Laundering and Counter-Financing of Terrorism policy, Business Continuity Management policy, IT and Information Security policy, Risk Management Policy, Whistle blower Policy etc.
The Company has defined a set of process level controls across its business and support functions such as premium, reinsurance, claims management, agency management, fixed assets etc. The control type covers key operating controls, financial reporting controls & IT controls have been done to ensure compliance with COSO framework.
The Company''s internal financial control framework is based on ''three lines of defence model''. The Company has laid down standard operation procedures and policies to guide the business operations. The Company has a well-defined delegation of power with authority limits for
approving revenue and capital expenditure. Statutory, Concurrent and Internal Auditors including internal audit department of the Company undertake rigorous testing of the control environment of the Company.
The Company has a Chief Audit Officer with a dedicated internal audit team which is commensurate with the size, nature & complexity of operations of the Company.
The Company also undergoes an independent internal / concurrent audit by specialised third party professional consultants to review function specific regulatory compliances as well as internal controls.
The Audit Committee reviews reports submitted by the Management and audit reports submitted by the internal auditors and statutory auditors. Suggestions for improvements are considered and the Audit Committee follows up on corrective actions. The Audit Committee also meets the Company''s Statutory Auditors to ascertain their views on the adequacy of internal control systems and keeps the Board of Directors informed of its major observations, if any periodically.
There were no qualifications, reservations, adverse, remarks or disclaimers on Internal Financial Controls made by the Statutory Auditors in their report for the financial year ended March 31, 2023.
19. Related Party Transactions
The Company has Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions to regulate the transactions with its related parties. As per the policy, all related party transactions require approval of the Board Audit Committee. Further, as per Rule 6A of the Companies (Meeting of Boards and its Powers) Rules 2014, the Audit Committee may grant omnibus approval for related party transaction proposed to be entered into by the Company subject to terms and conditions mentioned in the said Rule.
All the Related Party Transactions entered during the financial year were on arm''s length basis and in ordinary course of business. All related party transactions are placed before the Audit Committee of the Board for its approval. During the year, there were no material contracts or arrangements or transactions with related parties that need to be disclosed as per Section 188(1) of the Companies Act, 2013.
M/s. S.K. Patodia & Associates, Chartered Accountants, reviewed the related party transactions for the year ended March 31, 2023 and their certificate is placed at the meeting of the Board Audit Committee, along with details of such transactions.
All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 43 of Schedule 16(C) - Notes to Accounts of the Financial Statements of the Company.
The policy on materiality of Related Party Transactions and on dealing with Related Party Transactions, has been hosted on the website of the Company can be viewed at https://www.sbilife.co.in/en/about-us/investor-relations
IRDAI ("Authorityâ) vide its circular dated January 21, 2020 has withdrawn its erstwhile circular dated June 28, 2017 on implementation of Ind AS from FY 2020-21 and dispensed with the requirement of quarterly submission of Proforma Ind AS financial statements on account of proposed amendments in IFRS 17 by International Accounting Standard Board (IASB).
IASB has notified the amended IFRS 17, with global date of implementation starting from January 1, 2023. The Institute of Chartered Accountants of India (''ICAI'') has issued exposure draft of amendments in Ind AS 117 on February 8, 2022. The amended Ind AS 117 is under process of notification. The IRDAI (the Authority) vide its communication dated July 14, 2022 on Ind AS implementation in Insurance Sector has conveyed its broad approach on Ind AS implementation and necessary steps to be initiated by the insurers. The authority advised insurers to set up steering committee for Ind AS implementation.
Ind AS implementation (specifically Ind AS 117) will have major change in current accounting and reporting practice. The Ind AS implementation will also impact the business, operational, regulatory and IT systems. The roadmap/strategy for Ind AS implementation involves initial Gap and impact assessment to identify financial and other impacts, building the initial work plan and implementation roadmap, formulating accounting policies, system and process requirements and execution of implementation plan and monitoring.
As per the directions of Authority, the Company has constituted Steering Committee headed by President & CFO and members from cross-functional areas such as actuarial, investment, information technology. The Company has engaged knowledge partner for Ind AS GAP and impact assessment. The process of Ind AS GAP and impact assessment is in progress. The Knowledge partner has conducted various training session on different aspects of IFRS 17/Ind AS 117. Further, the concerned team members have also attended the IFRS 17 training session organised by Institute of Chartered Accountant of India (ICAI) and Institute of Actuaries of India (IAI). The final dates for Ind AS implementation are yet to be announced by the Authority.
21. Board of Directors and Key Management Person
Change in Directors and Key Managerial Person (KMPs) during the year:
|
Name of the Director/KMPs |
Nature of change |
With effect from |
|
Mr. Ashwini Kumar Tewari |
Ceased as Nominee Director, State Bank of India |
July 14, 2022 |
|
Mr. Swaminathan Janakiraman |
Appointed as Nominee Director, State Bank of India |
July 20, 2022 |
|
Ms. Seema Trikannad |
Superannuation as Executive Vice-president & Chief of Human Resources & Management Services |
October 31, 2022 |
|
Mr. Subodh Kumar Jha |
Appointed as Executive Vicepresident & Chief of Human Resources & Management Services |
November 01, 2022 |
|
Mr. Veeraraghavan Srinivasan |
Appointed as Deputy Chief Executive Officer |
December 27, 2022 |
|
*Key Management Persons as per Corporate Governance Guidelines for Insurers in India, 2016 |
||
Mr. Mahesh Kumar Sharma, Managing Director & Chief Executive Officer; Mr. Sangramjit Sarangi, President & Chief Financial Officer and Mr. Vinod Koyande, Company Secretary are designated as "Key Managerial Personnelâ of the Company, under the provisions of Section 203 of the Companies Act, 2013.
Further, in accordance with Corporate Governance Guidelines ("CG Guidelinesâ) issued by IRDAI the Company has sixteen (16) Key Management Persons including above mentioned Key Managerial Personnel.
All Independent Directors have registered themselves in the Independent Director Databank and have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16 of the Listing Regulations. The Company has also received declarations from all its Directors as per Section 164 of the Companies Act, 2013, confirming they are not disqualified from being appointed as Directors of the Company. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Independent Directors have confirmed that their names have been added in the data bank maintained by the Indian Institute of Corporate Affairs for Independent Directors, in accordance with rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014. Pursuant to Rule 6 of the said Rules, every Independent Director whose name is included in the data bank shall pass an online proficiency self-assessment test. However, the Director who has fulfilled the criteria prescribed in Rule 6(4) of the said Rules, is exempted from passing the
online proficiency self-assessment test. In view of the same, none of the Independent Directors were required to take the proficiency self-assessment test.
The said declarations along with annual disclosures were noted by the Board of Directors at its Meeting held on April 26, 2023. Further, based on these disclosures and confirmations, the Board is of the opinion that the Directors of the Company are distinguished persons with integrity and have necessary expertise and experience to continue to discharge their responsibilities as the Director of the Company.
In accordance with Guidelines for Corporate Governance issued by IRDAI, the Directors of insurers have to meet the ''Fit and Proper'' criteria. Accordingly, all the Directors of the Company have confirmed compliance with the ''Fit and Proper'' criteria, prescribed under the Corporate Governance Guidelines issued by the IRDAI.
Directors & Officers Liability Insurance
Regulation 25 (10) of the SEBI (Listing Obligations & Disclosures Requirement) Regulations 2015 requires the Companies to take Directors & Officers Liability Insurance (D & O Insurance) for all its Independent Directors. The Company has taken D & O Insurance for all its Board of Directors and Members of the Senior Management for such quantum and risks as determined by the Board.
Pursuant to Section 48A of the Insurance Act, 1938, the Company has obtained the necessary approval from IRDAI for Directors having common directorship with State Bank of India (being corporate agent of the Company).
During the year, ten Board Meetings were convened and held, the details of which are given in the report on Corporate Governance, which is forming a part of this Board Report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board and Committee Meetings, and the attendance of Directors thereat, forms part of the Corporate Governance Report, which is annexed to this Directors'' Report.
During the FY 2023, the Company complies with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
The Company has adopted a Remuneration Policy for the Directors, KMPs and employees in Senior Management, pursuant to the provisions of Section 178 of the Companies Act, 2013 and the Listing Regulations, the Remuneration Policy was approved by the Board of Directors on the recommendations of the Board Nomination & Remuneration Committee. The detail of
the said policy is annexed as Annexure I which forms part of this Report.
The Corporate Governance philosophy of the Company is to comply with not only the statutory requirements but also to voluntarily formulate and adhere to a strong set of Corporate Governance practices which includes code of business conduct, corporate ethics, values, risk management, etc.
Through governance mechanism, the Board along with its Committee discharge its fiduciary responsibilities towards all its stakeholders by ensuring transparency, accountability, fairness and independence in its decision making.
The Report on Corporate Governance is annexed and forms part of this Annual Report.
23. Corporate Social Responsibility
The Company constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility) Rules 2014, which drives the CSR program of the Company.
The CSR Committee of the Board confirms that, the implementation and monitoring of CSR policy, is in compliance with CSR objectives and Policy of the Company.
The brief outline of CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the financial year have been disclosed in Annexure II to this report, as mandated under the said Rules. Further, the Corporate Social Responsibility Policy of the Company as approved by the Board has been hosted on the website of the Company at https://www.sbilife.co.in/ en/about-us/corporate-social-responsibility
24. Particulars of Loans, Guarantees or Investment
In line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated 13 February 2015, the provisions of Section 186 of the Companies Act 2013 relating to loans, guarantees and investments do not apply to the Company.
25. Subsidiary, Joint Ventures and Associate Companies
The Company does not have any Subsidiary, Joint Ventures or Associate Company.
26. Rural and Social Sector Obligations
As per the regulatory requirements, the Company has met its Rural and Social Sector obligations for FY 2023. As against the minimum requirement of 20%, the Company has issued 31.87% policies in the rural sector which affirms the Company''s approach towards life insurance inclusion. Further, 10,99,727 new lives covered (7.04% of total new lives covered in preceding year) by the Company are from the underprivileged social sector as against the regulatory requirement of at least 5% of total lives covered in preceding year. Consequently, the Company has met the minimum social and rural regulatory norms.
Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations 2002, the Management Report is placed separately and forms part of the Annual Report.
In view of the applicability of Section 139 of the Companies Act 2013, Comptroller and Auditor General of India (C&AG) appoints Statutory Auditors of the Company. Accordingly, C&AG appointed M/s S.K. Patodia & Associates, Chartered Accountants and M/s S.C. Bapna & Associates, Chartered Accountants, as joint statutory auditors of the Company for FY 2023.
Statutory Audit and other fees paid to Joint Statutory Auditors for FY 2023 as below:
|
(? in 000''s) |
|
|
Particulars |
Amount |
|
Joint Statutory Audit Fees |
7,300 |
|
Other Certification Fees |
2,258 |
29. Statutory Auditors'' Report
The Statutory Auditors'' Report (including annexure thereof) to the Members does not contain any qualification, reservation, adverse remark, or disclaimer hence do not call for any further comments u/s 134 (3) (f) of the Companies Act 2013. There were no reportable frauds identified by the statutory auditors during the FY2023.
30. Comments of the Comptroller and Auditor General of India on the accounts of the Company
The Comptroller & Auditor General of India (C&AG) have conducted a supplementary audit u/s 143(6)(b) of the Companies Act, 2013 of the accounts of the Company for the year ended March 31, 2023. The C&AG vide their report no. GA/CA-I /Accounts /SB I Life/2022-23/ DIS-94163 dated July 17, 2023 have stated that there is nothing significant which would give rise to any comment upon or supplement to Statutory Auditors'' Report.
The Report of C&AG is being placed with the report of Statutory Auditors of the Company.
31. Secretarial Auditors'' Report
In terms of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has with the recommendations of Audit Committee and approval of Board of Directors appointed M/s N. L. Bhatia & Associates, Practicing Company Secretaries as the Secretarial Auditor of the Company for the FY 2023.
The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his report for FY 2023. The Report of the Secretarial Auditor for the FY 2023 is enclosed as Annexure III to the Board Report.
32. Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company as the Central Government has not prescribed the maintenance of cost records under Section 148 of the Act for the services rendered by the Company.
33. Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 (as amended by the Companies (Amendment) Act, 2017), read with Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual Return (in form MGT 9) (Annexure IV) is hosted on the website of the Company and can be viewed at https://www.sbilife.co.in/en/about-us/investor-relations with the information available up to the date of this report, and shall be further updated as soon as possible but no later than sixty days from the date of the Annual General Meeting.
34. Material Events, Changes and Commitment affecting Financial Position of the Company
No material events, changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.
35. Other Events
IRDAI vide its order no. IRDAI/F&I/ORD/ MISC/119/6/2023 dated June 2, 2023 passed in terms of section 52B (2) of the Insurance Act, 1938 has ordered to transfer the life insurance business of Sahara India Life Insurance Company Limited (''SILIC'') involving policy liabilities and policyholders'' investment/assets to SBI Life
Insurance Company Limited (''SBI Life'' or ''the Company''). On appeal filed by SILIC against the said IRDAI order, the Securities Appellate Tribunal (SAT or Tribunal) vide its order dated June 13, 2023 has granted stay on the effect and operation of the said IRDAI order. Subsequently, the IRDAI filed an appeal with Hon''ble Supreme Court against the stay order passed by SAT. The Hon''ble Supreme Court has heard this matter on July 17, 2023. The Company is awaiting further directions from the Authority in this regard.
36. Significant and Material Orders Passed by Regulators or Courts or Tribunals impacting the Going Concern Status and Operations of the Company
In FY 2023, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operation in future.
37. Director''s Responsibility Statement
In terms of Section 134(3) (c) read with 134(5) of the Companies Act, 2013 and the Corporate Governance Guidelines, your Directors confirm that;
a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2023 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the accounts for the current financial year ended March 31, 2023 on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
|
38. Particulars of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo |
|||||
|
A. |
Conservation of Energy |
||||
|
In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134 (3) and Rule 8 (3) of Companies (Accounts) Rules, 2014, is not applicable to the Company. |
|||||
|
B. |
Technology Absorption |
||||
|
Sr. No. Particulars |
Remarks |
||||
|
Research & Development (R&D) |
|||||
|
1. |
Specific areas in which R & D carried out by the Company |
Progressive Web Apps (PWA''s): PWA make the apps device and OS agnostic, leading to better user experience. This eliminates the need to write separate codebase and consider OS-specific functionality which is indeed less time-consuming and more budget friendly. Gives App like experience when used in mobiles. |
|||
|
2. |
Benefits derived as a result of the above R&D |
In the year under review, we have been able to roll out a number of initiatives based on the R&D done in Digilab. A few noted ones are provided below: - |
|||
|
PWA is implemented in Smart Care and Smart Advisor and is in progress for mConnect. |
|||||
|
Benefits of PWA: Short loading time, Good performance in poor network conditions, Small size, App like features, avoid app aggregators, Instant updates, Adapts to various operating systems and screen sizes (Mobile and PC''s) |
|||||
|
3. |
Future plan of action |
We will continue to work with the new technologies available and find ways to improve the experience for our stakeholders in technology area |
|||
|
4. |
Expenditure on R & D: (a) Capital |
||||
|
(b) Recurring (c) Total |
In-house development. |
||||
|
(d) Total R & D expenditure as a percentage of total turnover |
|||||
|
Technology absorption, adaption and innovation |
|||||
|
1. |
Efforts, in brief, made towards technology absorption, adaptation and innovation |
Video based PIVC and Face Matching: For High Risk Profile Proposal, Video based consent is enabled in Insta PIVC Screen. The customers are required to smile in the video on this system for validation. |
|||
|
2. |
Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. |
Key benefits are system as ensured that customer is alive at the time of taking the policy in order to avoid fraudulent business |
|||
|
3. |
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: |
||||
|
(a) Technology imported (b) Year of import (c) Has technology been fully absorbed? |
Nil |
||||
|
(d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. |
|||||
|
C. |
Foreign Exchange Earnings and Outgo |
||||
|
Details of foreign exchange earnings and outgo required under above Rules are as under: |
|||||
|
('' in billion) |
|||||
|
Particulars |
FY 2023 |
FY 2022 |
|||
|
Foreign Exchange Earnings |
0.13 |
2.41 |
|||
|
Foreign Exchange Outgo |
0.13 |
0.03 |
|||
The Company has always valued its customer relationships and it is the Company''s belief that all stakeholders should have access to complete information regarding its position to enable them to accurately assess its future potential. The Company disseminates information on its operations and initiatives on a regular basis. The Company''s website (www.sbilife.co.in) serves as a key awareness facility for all its stakeholders, allowing them to access information at their convenience. It provides comprehensive information on the Company''s strategy, financial performance, operational performance and the latest press releases.
The Company publishes financials results on a quarterly basis. The financial results of the Company are prepared and posted on the website of the Company for the current as well as previous years. Further, the quarterly results and earnings update are also posted on the website of the Company. Every quarter, the Managing Director & CEO alongwith the Senior Management officials of the Company participate on a call with the analysts/shareholders. The Company''s investor relations personnel respond to specific queries and play a proactive role in disseminating information to both analysts and investors. All information which could have a material bearing on the Company''s share price is released through as per regulatory requirements.
40. Business Responsibility and Sustainability Report
Business Responsibility & Sustainability Report as stipulated under Regulation 34 of the Listing Regulations form part of the Annual Report and has been hosted on the website of the Company https://www.sbilife.co.in/en/ about-us/investor-relations/annual-reports
The Securities Exchange Board of India had recommended top 500 listed entities to voluntarily prepare their Annual Report adopting the principles of Integrated Reporting prescribed by the International Integrated Reporting Council.
In view of the above, The Company has voluntarily adopted the principles and has prepared its 5th Integrated Report for FY 2023 which forms part of this Annual Report.
The Insurance Regulatory and Development Authority of India (IRDAI) have renewed the annual license of the Company to continue the Life Insurance Business. The license is in force as on March 31, 2023.
43. Other InformationA. Economic Capital:
The annual assessment of Economic Capital of SBI Life was carried out as on March 31, 2023. As part of this exercise, we have quantified the capital requirements relating to various risks such as Insurance Risks (Mortality risk, Morbidity
Risk, Longevity Risk, Persistency Risk, Expense Risk, Catastrophe Risk) and Non- Insurance Risks (Market Risk, Operational Risk, Default Risk). As at March 31, 2023, Solvency ratio on Economic Basis is 3.12. The Solvency Ratio on Economic Basis has been estimated as, the ratio of excess of economic assets over economic liability to Total Economic Capital Requirement.
The Directors are pleased to report that the assets of the Company are higher than the liabilities of the Company and the assets are more than sufficient to meet the minimum solvency margin level of 1.50 times, as specified in section 64 VA of the Insurance Act, 1938 read with the IRDAI (Assets, Liabilities, and Solvency Margin of Life Insurance Business) Regulations, 2016. The Company has a strong solvency ratio of 2.15 as on March 31, 2023 (Previous year ended March 31, 2022: 2.05) as against the Regulatory requirement of 1.50.
a) IRDAI has issued directions under section 34 (1) of the Insurance Act, 1938 to refund the excess commission paid to corporate agents amounting to '' 2,752,948 thousand (previous year ended March 31, 2021: '' 2,752,948 thousands) vide order no. IRDA/Life/ORD/ Misc/083/03/2014 dated March 11, 2014, to the members or the beneficiaries. The said IRDAI order has been set aside by the Securities Appellate Tribunal (SAT) vide its order dated January 29, 2020. The SAT has remitted the matter to IRDAI with a direction to recalculate the interest earned on advance premium collected. Subsequently, on March 3, 2021 the Company has received notice of institution of civil appeals filed by IRDAI in Supreme Court against the SAT order dated January 29, 2020. The Company on the basis of legal opinion and good case on merits has challenged the order of January 29, 2020 with Hon''ble Supreme Court of India vide a Civil Appeal instituted on June 22, 2021. At hearing held on July 26, 2021 by the Hon''ble Supreme Court notice has been issued to IRDAI. The Counter Affidavit was filed by IRDAI on September 9, 2022 and the Company has filed its response with registry of Hon''ble Supreme Court on October 27, 2022. The matter is due for listing before the appropriate bench.
b) IRDAI has issued directions under section 34(1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 843,174 thousands vide its order no. I RDA/Life/ORD/ MISC/228/10/2012 dated October 5, 2012 and subsequent order no. IRDA/Life/ORD/
MISC/009/01/2017 dated January 11, 2017. The Securities Appellate Tribunal (SAT) vide its order dated April 7, 2021 has dismissed the appeal filed by the Company against the IRDAI order. Subsequently, the Hon''ble Supreme Court vide its order dated September 22, 2021 has dismissed petition filed by the Company against the SAT order. Accordingly, in FY 2022, the Company has made provision in the Profit and Loss Account (Shareholders'' Account) for refund of administrative charges paid to group master policy holders amounting to '' 843,174 thousands plus applicable interest as per IRDAI order dated January 11, 2017. As at March 31, 2023, out of the total provision amount, the Company has refunded administrative fees of '' 524,227 thousands along with interest of '' 205,792 thousands to the members of group insurance policy.
D. Appointed Actuary''s Certificate
The certificate of the Appointed Actuary on valuation and actuarial assumptions is enclosed in the financial statements.
E. Certificate from Compliance Officer (under the IRDAI Corporate Governance Guidelines)
A Compliance Certificate, for complying with IRDAI Corporate Governance Guidelines, issued by the
Company Secretary, designated as the Compliance Officer under the IRDAI Corporate Governance Guidelines, is enclosed and forms part of the Corporate Governance Report.
The Directors are grateful to the Insurance Regulatory and Development Authority of India (IRDAI), Reserve Bank of India (RBI), Comptroller and Auditor General of India (C&AG), Securities and Exchange Board of India (SEBI) and Government of India (GOI) for their continued co-operation, support and advice. The Directors would also like to take this opportunity to express their sincere thanks all the policyholders, shareholders, customers, employees, re-insurers, bankers and distributors for reposing their trust and confidence in the Company. The Directors also express their gratitude for the advice, guidance and support received from time to time, from the auditors, and statutory authorities.
Mar 31, 2018
Directors'' Report
To,
The Members of
SBI Life Insurance Company Limited
The Directors are pleased to present their 18th Annual Report along with audited financial statements of SBI Life Insurance Company Limited ("SBI Life" or "the Company") for the year ended March 31, 2018.
1. SUMMARY OF FINANCIAL RESULTS
This was another year of successful operations for the Company. The Company has earned a Gross Written Premium of Rs, 253.54 billion driven by a strong growth in Individual business. The Company continued meeting its stakeholdersRs, expectations achieving profitable growth year on year.
The summary of the financial performance of the Company for FY 2018 is presented below:
(Rs, billion)
|
Particulars |
FY 2018 |
FY 2017 |
|
Financial Parameters |
||
|
Gross Written Premium (GWP) |
253.54 |
210.15 |
|
-New Business Premium |
109.66 |
101.44 |
|
-Renewal Premium |
143.88 |
108.71 |
|
Profit / (Loss) before taxation |
14.22 |
11.54 |
|
Provision for taxation |
2.72 |
2.00 |
|
Profit / (Loss) after taxation |
11.50 |
9.55 |
|
Profit at the beginning of the year |
44.65 |
36.91 |
|
Total profit available for appropriation |
56.15 |
46.45 |
|
Appropriations: |
||
|
Interim dividend (Including dividend distribution tax) |
2.41 |
1.81 |
|
Profit carried to the balance sheet |
53.74 |
44.65 |
|
Earnings per equity share (Basic & Diluted) (in Rs,) |
11.50 |
9.55 |
|
Individual Rated Premium |
77.88 |
59.36 |
|
Assets under Management (AUM) |
1,162.61 |
977.37 |
|
Net worth |
65.28 |
55.52 |
|
Key performance indicator: |
||
|
Embedded Value |
190.70 |
165.38 |
|
Annualized Premium Equivalent (APE) |
85.38 |
67.27 |
|
Value of New Business (VoNB) |
13.85 |
10.37 |
|
New Business Margin |
16.2% |
15.4% |
|
Operating expense ratio |
6.8% |
7.8% |
|
Commission ratio |
4.4% |
3.7% |
|
Total cost ratio* |
11.2% |
11.6% |
|
Solvency ratio |
2.06 |
2.04 |
|
Persistency ratio (13th month on premium basis) |
83.0% |
81.1% |
|
Number of new policies (in 000''s) |
1,428.46 |
1,275.50 |
*Total Cost = Operating expenses Commission Provision for doubtful debts Bad debts written off
2. HIGHLIGHTS OF RESULTS AND STATE OF COMPANY''S AFFAIRS
The Company witnessed a growth and consistent performance in FY 2018. The key financial parameters of the Company are as follows:
Individual NBP has grown by 30.0% from '' 64.68 billion in FY 2017 to '' 84.07 billion in FY 2018 due to increase in Individual Regular business 31.4%.
Individual NBP private market share increased from 20.2% in FY 2017 to 20.8% in FY 2018. While overall market share in individual NBP has increased from 8.3% in FY 2017 to 9.1% in FY 2018.
APE has increased by 26.9% to Rs, 85.38 billion over previous year primarily due to increase in individual NBP generated through bancassurance and agency channel.
Protection NBP has increased by 23.1% to Rs, 6.00 billion in FY 2018 from Rs, 4.87 billion in FY 2017.
GWP collected during the year was Rs, 253.54 billion registering a growth of 20.6% primarily due to increase in renewal premium by 32.4% from Rs, 108.71 billion to Rs, 143.88 billion.
- The Company''s profit after tax grew by 20.5% and stands at Rs, 11.50 billion in FY 2018 against Rs, 9.55 billion in FY 2017.
The operating expense ratio (Operating Expense to GWP) stands at 6.8% as against 7.8% in FY 2017.
The Company has achieved a milestone by crossing its AuM '' 1 trillion during the financial year and registered a growth of 19.0% to Rs, 1,162.61 billion from Rs,977.37 billion in FY 2017.
Solvency ratio of the Company stands at 2.06 as against the regulatory requirement of 1.5 indicating the strong & stable financial health of the Company.
The 13th month persistency ratio (based on premium) improved to 83.0% in FY 2018 from 81.1% in FY 2017.
I ndian Embedded Value of the company stands at Rs, 190.70 billion, as on March 31, 2018 as compared to Rs,165.38 billion as on March 31, 201 7. Value of New Business grew by 33.6% from Rs, 10.37 billion to Rs, 13.85 billion in FY 2018 leading to an increase in value of new business margin from 15.4% to 16.2% in FY 2018.
- Distribution reach
The Company continues to emphasise on the expansion of its distribution reach through opening up of new offices and quality recruitments. As at March 31, 2018, the Company has 825 offices, 108,261 Insurance Advisors (IAs) and 49,527 Certified Insurance Facilitators (CIFs) across the country as against corresponding figures of 801 offices, 95,355 IAs and 39,688 CIFs respectively as on March 31, 2017.
During the year the Company collected New Business Premium of Rs, 109.66 billion, comprising of Rs, 68.42 billion from ''Bancassurance'' which represents company''s largest distribution network, '' 27.48 billion from Retail Agency, and '' 13.76 billion from other distribution channel, including direct sales, sales by nonbancassurance corporate agents, brokers, micro agents, common service centres (CSC), insurance marketing firms (IMFs) and Web aggregators.
The Company''s direct sales primarily comprises sale of group products, as well as standardized individual products sold through online offerings.
The Company has obtained necessary regulatory approvals for opening branch offices in kingdom of Bahrain from IRDAI and Central Bank of Bahrain (CBB) for carrying out life insurance business. The target market will be Non-Resident Indian (NRI) and Person of Indian Origin (PIO) only. Further, the Company continue to explore opportunities to expand our operations in other geographical regions.
3. INDUSTRY AND COMPANY OUTLOOK
In India, life insurance industry is poised for a sustainable and profitable growth in long run. Multiple factors, stemming from macro-economic, demographic and regulatory changes are catalyzing the growth of the life insurance market.
Over the years, the industry has undergone fundamental shifts such as rapid expansion, rebalancing of distribution mix, transitions of product mix, digital transformation, capital inflows, and approach towards customer-centricity. As a result, Industry has shown creditable growth both in new business premium collection and new policies sold. In FY2018, Industry reported 11% growth in new business premium collection with the help of both Private Players and Life Insurance Corporation. Private life insurers enjoyed a healthy growth of 18% during financial year.
Despite under penetration and low sum assured in life insurance segment, industry has a considerable amount of potential to grow exponentially in upcoming year. Life Insurers'' ability to innovate products matching risk profile of policyholders, reengineering the distribution, focus on adopting digital tools to reduce cost to serve, making sales and marketing more responsible and answerable, and regulatory support to encourage transparency and accountability offers more avenues in the wake of this fast growing economic environment.
Life insurance industry is supported by government policy actions and reform measures which are aimed at financial inclusion, clean up and consolidation of banking sector, more foreign investment friendly measures, better tax compliance, and digital connectivity.
Additionally, the regulator has issued various regulations/circular for the life insurance sector such as IRDAI (Payment of commission or remuneration or reward to insurance agents and insurance intermediaries) Regulations, 2016, IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017, Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, IRDAI (Protection of Policyholders'' Interests) Regulations, 2017, IRDAI Master Circular (Unclaimed Amounts of Policyholders), 2017.
With several changes in regulatory framework which are expected to further changes in the way the industry conducts its business and engages with its customers. Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance.
Sustained efforts towards creating awareness and working to enhance the industry''s reach will lead to fruition of the objective of having a country of individuals who are financially protected.
The Company strategy focuses on the following:
1. Leveraging life insurance industry growth through deeper penetration, increasing share of protection business and increasing market share through a balanced portfolio of protection and savings products.
2. Increasing geographical reach by using our expansive distribution network and strengthening our distribution mix by leveraging relationships with new corporate agents, broker partners and web aggregators.
3. Maximizing customer satisfaction by offering comprehensive suite of products of transparent nature at competitive prices and improving customer experience from client on-boarding to claims settlement.
4. Digitization and automation of sales processes to improve distribution and operational efficiencies.
4. DIVIDEND AND RESERVES
The board at its meeting held on March 23, 2018 has declared an interim dividend of Rs, 2.00 per equity share (previous year Rs, 1.50 per equity share) which amounts to a total pay-out of Rs, 2.41 billion (including dividend distribution tax) (previous year Rs, 1.81 billion). No final dividend is recommended for the year ending
March 31, 2018 and interim dividend declared is to be confirmed as final dividend.
The Company has carried forwarded Rs, 9.10 billion to its reserves and surplus, and had accumulated balance of Rs, 53.74 billion as on March 31, 2018.
In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Dividend Distribution Policy of the Company is disclosed on the website https://www. sbilife.co.in/dividend-distribution-policy
The Company has uploaded the details of unpaid and unclaimed dividend on the Company''s website: https://www.sbilife.co.in/sbi-life---unclaimed-dividend-list-fy-2017-18
5. CAPITAL
The shareholding pattern during the year under review is in compliance with the statutory requirement. There was no fresh capital infusion by the promoters in the Company during FY 2018. The authorized share capital and paid up share capital of the Company stands at '' 20.00 billion and '' 10.00 billion respectively. The shareholding pattern is provided as a part of Form No. MGT-9 which is annexed to this Report and under Schedule - 5A which forms part of the Financial Statement.
During the FY 2018, the Company had completed its Initial Public Offer ("IPO") by way of an Offer for Sale (OFS) of 120,000,000 equity shares of face value of '' 10 each of the Company at Offer Price of '' 700 per equity share aggregating to '' 83.89 billion (net of employee discount), by the Selling Shareholders State Bank of India and BNP Paribas Cardif S.A. of 8,00,00,000 equity shares and 4,00,00,000 equity shares, respectively.
The shares of the Company were listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) on October 3, 2017.
6. DEPOSITS
During the year under review, the Company has not accepted any deposits from the public as per Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
7. AWARDS & RECOGNITIONS
The Company has won several awards during the year, some of which are highlighted below:
Won the Brand of the Year 2016-17 Award in the Insurance Category by World Consulting & Research Corporation (WCRC)
Won the Fintelekt Insurance Awards 2017 in the following 3 categories
a. Private Sector Life Insurance Company of the Year (Large Category)
b. Bancassurance Leader, Life Insurance (Large Companies Category)
c. Data Analytics Initiative of the Year (overall award across Life, General, Health)
- Awarded ''India''s Leading insurance Company -Life'' (Private sector) at the Dun & Bradstreet BFSI Summit 2018''.
Won Skoch Resilient India awards 2017 for two projects
a. Predictive Analytics and automation of renewal Management System
b. Integrated Death Claims Management System
- Adjudged one of the "Most Trusted Brand, 2017" for the seventh consecutive year by The Economic Times Brand Equity - Nielsen survey.
We believe that each of the awards demonstrates the Company''s commitment to achieve excellence, across all spheres of its activities and operations. We owe these awards to the constant support and trust reposed by our Policyholders and Stakeholders and the hard work and dedication of our work force.
8. PRODUCTS
SBI Life has a wide range of products catering to various customer needs in the life, health, pension & micro-insurance segments. These products are customer centric, simple to understand and have competitive features.
To maintain its competitive edge in the market, the Company had launched two new individual products and eight existing products (individual and group) with modifications during FY 2018.The details of the new products launched in FY 2018 are as follows:
1. SBI Life - Sampoorn Cancer Suraksha (UIN: 111N109V01):
This is an individual non-linked, non-participating health insurance product.
2. SBI Life - Poorna Suraksha (UIN: 111N110V01): This is an individual non-linked, non-participating term insurance product with in-built critical illness cover.
9. CUSTOMER AND PARTNER SERVICE ENABLEMENT
Being a customer centric organization, the operations group at SBI Life maintains a consistent focus on enhancing and upgrading their work processes and systems with the aim of creating greater value in all its customer interactions across all customer touch points. With a view to meet and exceed customer expectations and remain competitive in the market place, the functional departments have undertaken several initiatives in line with the emerging technologies.
These initiatives will help the organization to build processes that are more robust, consistent and scalable. They will also result in the empowerment of the front line staff across all customer touch points to service our customers more efficiently. Some of the key initiatives undertaken by different departments of the Company are described below:
A. Client Relationship
The client relationship department is pivotal in ensuring that customer queries and grievances are resolved to the full satisfaction of the customer within defined timelines, and therefore our initiatives this year have been to empower our employees to improve the query and grievance handling mechanisms.
Up gradation of Customer Relationship Management (CRM) Module: - CRM Next, is an automated workflow that has been created for handling customer grievances, obtaining sales comments & recommendation from the Regional Leadership group, initiating investigation wherever necessary, and seeking necessary approvals from the Competent Authority. It is a digital platform for conducting a root cause analysis of all the customer complaints and queries. It also facilitates quality check of the grievance handling mechanism to ensure that any gaps are identified and plugged immediately.
Under the Customer 360 degree view, the details of all the policies held by customer and his service request history are maintained. Additionally, real time information on the plan details, service history records of the policy life cycle along with the policy status is provided, which helps in resolution of customer grievances.
With the launch of CRM Next, we have moved towards a paperless complaints handling process. This has brought in perfectly consistent & coherent workflow with better record maintenance and process efficiency. It has also helped in reducing the overall resolution time of complaints.
Parivartan:- This is a module designed to empower SBI to log in SBI Life customer queries/ complaints received at their end for better tracking and faster resolution of queries/ complaints.
Root Cause Analysis:- The existing process of root cause analysis of complaints and queries has been improvised and a well defined procedure has been laid down. Every month, the complaints that arise due to service deficiencies are analyzed in depth and the observations are taken up for improving the process or systems. This procedure has helped in identifying and addressing process gaps thereby strengthening our processes by making them more efficient and customer centric. It has also led to reduction in instances of similar complaints.
B. Customer Engagement
The customer engagement department has seen multiple strategic initiatives to connect with our customers in a more professional, yet personalized manner. Apart from the customer awareness campaigns that the Company executed through email and SMS to spread awareness about Life Insurance and other initiatives to provide enhanced service experience to HNI clientele, the year 2017-18 also saw the introduction of two major Customer Centric initiatives:
Introduction of the Net Promoter Score (NPS) to gauge what the customers think about the organization, by reaching out to customers at Critical Moments of Truth in the Policy life Cycle. Feedback is now being sought at the policy issuance stage, at Payment of 4th year Renewal Premium and at Maturity of the policies. NPS implementation is currently at the initial stage and is a rich source of feedback. Data will be integrated with CRM Next (our new CRM module) for a complete view of the customers and form the basis of improving our processes to benefit customers. The knowledge of earlier customer feedback/ grievances will also enable the subsequent servicing agents to interact with the customers in a better manner.
Introduction of the Chat-Bot, named Real Intelligent Assistant (RIA), the automated online chat system that is available on our website. Currently, it is empowered to provide responses to most frequently asked questions, and going forward it is being developed to provide policy specific information to the existing/ potential prospects after due authentication.
C. New Business
a. PIWC in RiNn Raksha Housing Loan: Pre issuance Welcome Call (PIWC) has been initiated for the RiNn Raksha Housing Loan cases. This has been done to ensure that: the customer is covered under the right policy as per his/ her choice & needs.
Information provided by the customer in the proposal is correct. t he customer has understood the product features.
b. Revamping of Pre-Issuance Welcome Call (PIWC) calling scripts and reference to FAQ: Based on an analysis of the various queries that are put forward by the customers during the PIWC call, a complete revamp of the call centre scripts was undertaken to ensure greater clarification of customer queries during the PIWC. A set of FAQs were also shared with the call centre agents to help them with their query resolution process.
D. Underwriting
With an objective to further improve upon our underwriting practices as well as to reduce the risk of selection of any adverse lives, some of the notable initiatives undertaken by the Company are shared below:
Implementation of risk score based underwriting that will alert the underwriters of a probable high risk factor at the selection stage itself. This will prevent any inconvenience at a later stage, after the policy is issued.
Organized 360 degree training programme for all underwriters at Hubs (Regional underwriting Units) located at 16 regional centres with a view to create a better informed and well trained workforce.
New Business work flow implemented to make the issuance process faster and streamlined.
Financial underwriting based on credit information and score thereby reducing the financial requirements.
E. Policy Servicing
Revival Mela: - Revival campaign was conducted in FY 2017-18 with the motive of reviving lapsed policies and rebuilding the relationship with our policyholders. A total of 71,887 polices were revived leading to a renewal collection of '' 2.39 billion.
Predictive Analytics for Revival of Lapse policies:
- For revival of lapsed policies, predictive data analytics was used to identify the likelihood of revival of policies. The lapsed policies were classified into four categories with the help of different variables, so as to help the optimization of efforts to revive lapse policies during the campaign.
Proactive Surrender Prevention:- In order to prevent surrender in a proactive manner, surrender prevention analytics has been undertaken, where in Surrender-able policies of linked and non linked types are divided into three risk categories of Red, Amber and Green based on multiple variables like policy vintage, state, past-lapsation, lock-in period, educational qualifications and surrender related queries. Various SMS, email campaigns are being triggered to these customers highlighting the benefits
of the product on a regular basis and as part of an active engagement strategy.
Centralized Surrender Prevention Calling: -
Centralized Surrender calling commenced in FY 2017-18 through the outbound call centre. The calling is done by a specially trained team having detailed knowledge about products and the corresponding advantages which help them to convince customers to retain the policies till the end of the term. A total of 2,619 policies amounting to '' 0.55 billion have been retained in FY 2017-18 through Centralized Surrender Calling activity. This activity is over and above the "face-to-face" counseling activity in the branches.
Go Green: - Under the ongoing Go Green campaign, policyholders are encouraged to register for Electronic communications. A total of 7,18,285 policies were registered for Go Green in FY 2017-18.
Customer Self Service Portal:- In view of changing dynamics and increasing digitization of services across platforms, all new customers are being registered on our My Policy - Customer Self Service Portal to enable customers to have one view of all their policies and also do various transactions online. Unlike previous years where they were communicated of this facility, this year we are registering all new customers and communicating the user IDs to them to enable login and activity in the e- portal.
Premium collection through digital medium: - In
our Endeavour to push digital transactions, the Company has tied up with "Paytm" services for renewal premium collection and customers can now pay renewal premium through "Paytm".
Auto-mailer Available Anytime Anywhere:- A
series of auto mailers for renewal has been rolled-out during the FY 2017-18 covering various critical monitoring parameters, customized to different Groups (both from Operations and Sales) at different frequencies directly benefiting regional team and making data & analysis availability handy even when they are on field/tour.
F. Group Operations
a. Go App Mobile application
Launched a Mobile based application for Key Accounts Managers (KAM) & Business Development Managers (BDM) of Group Business to resolve basic queries related to Fund and Group Term Business Products.
The information available under the application is stated below:
Fund Products - New business list, mini fund statement, requirement upload, master policy search, claim view.
Sampoorn Suraksha - New Business list, renewal list, causation list, master policy search, member view, claim view, requirement upload, view of members for underwriting.
b. Group Customer Portal
Enhancement of Group Customer Portal for Annuity customers. Group Members can now view COE (Certificate of Existence) Status and group members can generate and download Annuity certificates.
Facility for the nominee/claimant to check the claim settlement status of the PMJJBY policies.
c. E-issuance of Group Term Master Policy documents
G. Outsourcing of activities
Outsourcing of Refund Initiation: The refund process has been partially outsourced so as to improve customer service by reducing the servicing time.
Outsourcing of Living Benefit claims processing:
This has led to reduction in claims settlement TAT (Turnaround Time), better manpower management and cost efficiency.
10. CLAIMS
Claims Management is a very important aspect of the insurance business. At SBI Life, customer focus at claims stage is ensured by providing efficient services, striving to exceed the customer expectations by creating avenues for increasing self service facilities, including setting up of programmes for effective resolution of customer grievances. In FY 2017-18, the claim settlement ratio for individual policies stood at 96.8% and for Group policies at 99.4%.
Post Issuance Profile Verification (PIPV): Profile verification of high risk cases through external investigation commenced since April 2017. In lieu of the revised Section 45 of the Insurance Act 1938, a policy cannot be called in question after three years from the commencement or revival even on the grounds of fraud. Hence, the process to conduct Post Issuance Profile Verification (PIPV) was introduced for existing policyholders. This exercise helps us to identify fraudulent cases and initiate appropriate action to curb fraud.
Decentralization of Individual Fast Track (Non Early) claims: Claims processing for cases where sum assured is up to 5 lakhs has been decentralized to branches all over India (only admissible cases other than lapse, open title & indemnity bond (in case of lost original policy document) cases). The branches have been empowered through the release of proper training and reference materials.
Maturity and Survival Benefit under Business Process Management (BPM) module: End to end workflow has been introduced for Maturity and Survival Benefits in BPM platform so as to reduce Turnaround Time and help in effective monitoring. Also, as a step towards digitalization, the existing Scan Flow system has been integrated with the BPM module to enable branches to view the documents received from policyholders on one platform.
First Time Right learning series: First Time Right learning series for claims processes was circulated to all employees periodically. The content reiterates and emphasizes on various documental requirements depending upon the claim type. This in turn will helps us to obtain all the documents required correctly at first place itself leading to faster processing of claim and customer satisfaction.
-All India Investigators'' Meet was conducted to sensitize the Investigators about concerns and expectations regarding the quality of investigations to be done as part of claims settlement process.
11. INFORMATION TECHNOLOGY
At SBI Life, as a practice, we are committed to implement innovative solutions and adopting the newer technology to provide more and more convenient options to customers. Few of such innovative and customer centric solutions are listed below:
a. Infrastructure
Upgrade of firewalls at Data Center (DC) and Disaster Recovery (DR) with Next Generation Firewall having Advance Persistence Threat (APT) solution using Sandblast technology to protect against Ransomware, malware, zero attack, unknown threat in DC & DR.
Augmentation of DR capacity to host more applications along with Infrastructure such as Core CISCO Nexus Switch and Infrastructure for Customer Relationship Manager (CRM), Data Loss Prevention (DLP) etc.
b. Process Area
Following are the major process improvements done:
During the financial year, all the policies were issued and serviced from the New Policy Management System - Ingenious. The old policies also will get migrated in the New System in the coming years. This would increase the quality of the customer servicing further more.
New Customer Relationship Management (CRM) system - Phase 1 is implemented in this year. The further enhancements are targeted for next financial year. This will help the end user servicing the customer to understand the complete details of the customer interactions at the customer touch points.
The New Business Workflow system is implemented during this financial year. This will provide mechanism for faster completion and issuance of the new policies.
12. INVESTMENTS
Equity markets gave good returns for the year amidst increased volatility across both domestic and international markets. Sensex gave a return of 11.3% for the year. Domestic debt markets were extremely volatile with a mixed bag of positive and negative developments. Indian Economy witnessed good growth as we continued to recovery from the ''post-demonetization'' slowdown. Higher imports as a result of stronger domestic demand combined with higher global crude oil prices weakened the current account balance. INR weakened very marginally by 0.04% at '' 65.17 despite external pressures owing to our strong Forex reserves, which hit an all time high of USD 424 billion.
Yield on 10-year Government of India Bond hardened by 64 basis points to end the year at 7.33%. Markets reacted negatively to higher inflation, wider fiscal deficits for FY 2018 and FY 2019 and series of rate hikes in US. Crude Oil prices moved up by 30% to USD 69 per barrel and added further pressure to India''s macroeconomic fundamentals. The introduction of GST, a landmark reform aimed at streamlining indirect taxes, met with initial challenges. The revenue collections continued to fall short of expectations. Moody''s Investor Services upgraded India''s sovereign ratings by one notch in November, but this failed to enthuse markets amidst pressures on the government''s finances.
The Assets under Management (AUM) of the Company has increased by 19.0% to Rs, 1,162.61 billion as on March 31, 2018 from Rs, 977.37 billion as at March 31, 2017. The AUM was made up of Rs, 613.25 billion of traditional funds (including shareholders'' funds) and '' 549.36 billion of Unit Linked Funds. The Unit linked portfolio majorly comprises of Equity funds, Bond funds and NAV guaranteed funds. The performance of both traditional and unit linked funds was satisfactory with majority of funds, equity and bond funds comfortably beating the benchmark and their respective peers.
13. PARTICULARS OF EMPLOYEES
SBI Life, one of the most trusted private Life insurance brands is now more than 17 years old. SBI Life family has grown from 12,051 employees as on March 31, 2017 to 13,207 employees as on March 31, 2018 which depicts a growth of 9.60%. While the average age of employees is 35 years 3 months, the average tenure is 4 years 5 month.
In accordance with the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. In terms of Section 136(1) of Companies Act, 2013 the Report and the Accounts are sent to the Members excluding the aforesaid Annexure. Any member interested in obtaining a copy of this Annexure may write to the Company Secretary at the Registered Office of the Company.
14. RISK MANAGEMENT
SBI Life is in the business of covering life risks on payment of a premium. Risk Management therefore becomes an integral part of its business activities. The Company recognize and manages its risks in a proactive, ongoing and positive manner. Risk philosophy of the Company is outlined in the Risk Management Policy. The Risk Management policy specifies the process for identification, measurement and analysis of the Company''s risk exposures; develop risk management strategies and its monitoring. The Risk Management Policy is supported by various other policies pertaining to insurance, market, compliance, outsourcing, fraud, information security and business continuity management. All the above policies are reviewed by the Risk Management Committee of the Board on an annual basis.
The Company has formulated risk appetite statements at the corporate as well as the functional level, which are reviewed and monitored by the Board level Risk Management Committee and Internal Risk Management Committee respectively. The Company also carries out an ICAAP (Internal Capital Adequacy Assessment Process) activity, which details the assessment of material risks, estimation of capital requirement and adequacy for maintaining solvency requirements.
The Company has aligned its risk management practices to ISO 31000:2009 and is in receipt of ''Statement of Compliance'' in respect of the same from British Standard Institute (BSI). This implies that the Company has strong processes for risk identification, management and mitigation. The Company''s Business Continuity Management System (BCMS) is ISO 22301 certified and its Information Security Management System (ISMS) is ISO 27001 certified.
More information on the risk practices adopted by the Company is available in the ''Enterprise Risk Management'' Section appended to this report and ''Management Report'' Section of the Annual report.
15. INTERNAL AUDIT AND COMPLIANCE FRAMEWORK
Internal Audit:
The Company has in place a robust internal audit framework. The Inspection and Audit (I & A) Department undertakes risk based audit approach and it commensurate with the nature of the business and the size of its operations. The internal audit plan covers Information System Audit, different process audit as well as transaction based audits at the Head office, Regional Offices and across various branches of the Company.
The audits are carried out by the internal audit team of the Company and also by the outsourced chartered accountants firms. The approach of the audit is to verify compliance with the regulatory, operational and system related controls. Key audit observation and recommendations are reported to the Board Audit Committee of the Company. Implementation of the recommendations is actively monitored.
Compliance:
The Board Audit Committee of the Company has laid down governing principles for managing the compliance framework of the Company. The Company has also formulated various internal policies and procedures to define framework for the working of various functions to ensure compliance. The Compliance function identifies and communicates regulatory requirements to relevant functions in a timely manner and monitors critical compliance risks based on suitable monitoring mechanism. The Compliance function works in liaison with the regulators and provides clarifications to various functions on applicable laws, regulations and circulars issued by the regulatory authorities. A compliance certificate signed by the Managing Director & CEO is placed at the Board Audit Committee on a quarterly basis.
16. INTERNAL FINANCIAL CONTROLS
The Company has aligned its internal financial control system with the requirements of the Companies Act 2013, on lines of globally accepted risk based framework as issued by Committee of Sponsoring Organizations (COSO). The internal control framework is intended to increase transparency and accountability in an organization''s process of designing and implementing a system of internal control. The framework requires the Company to identify and analyse risks and manage appropriate responses. The key components of the internal financial control framework include:
Entity level controls:
Entity Level Controls (ELCs) operates at an organization level. The Company has defined a set of entity level policies and controls. The ELCs set up by the Company includes various policies and procedure in place such as Anti Money Laundering and Counter-Financing of Terrorism policy, Business Continuity Management policy, IT and Information Security policy, Risk Management Policy, Whistleblower Policy etc.
Process level controls:
The Company has defined a set of process level controls across its business and support functions such as premium, reinsurance, claims management, agency management, fixed assets etc. The control type covers key operating controls, financial reporting controls & IT controls have been done to ensure compliance with COSO.
Review controls:
The Company''s internal financial control framework is based on ''three lines of defense model''. The Company has laid down standard operation procedures and policies to guide the business operations. The Company has a well-defined delegation of power with authority limits for approving revenue and capital expenditure. Statutory, Concurrent and Internal Auditors undertake rigorous testing of the control environment of the Company.
The Company has a Chief Audit Officer with a dedicated internal audit team which is commensurate with the size, nature & complexity of operations of the Company.
The Company also undergoes an independent internal/concurrent audit by specialized third party professional consultants to review function specific regulatory compliances as well as internal controls.
The audit committee reviews reports submitted by the Management and audit reports submitted by the internal auditors and statutory auditors. Suggestions for improvements are considered and the Audit Committee follows up on corrective actions. The Audit Committee also meets the Company''s statutory auditors to ascertain their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations, if any periodically.
Auditor''s Report
There is no qualification, reservation, adverse remark or disclaimer made by the auditors in their report on Internal Financial Controls.
17. RELATED PARTY TRANSACTIONS
The Company has Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions to regulate the transactions with its related parties. As per the policy, all related party transactions require approval of the Board Audit Committee. As per Rule 6A of the Companies (Meeting of Boards and its Powers) Rules 2014, the Audit Committee may grant omnibus approval for related party transaction proposed to be entered into by the Company subject to terms and conditions mentioned in the said Rule.
All the Related Party Transactions entered during the financial year were on arm''s length basis and in ordinary course of business. All related party transactions are placed before the Audit Committee of the Board for its approval. During the year, there were no material contracts or arrangements or transactions with related parties that need to be disclosed as per Section 188(1) of the Companies Act, 2013.
M/s. L.S. Nalawaya & Co., Chartered Accountants, reviewed the related party transactions for each quarter, and their report is placed at the meeting of the Board Audit Committee, along with details of such transactions.
All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 37 of Schedule 16(C) - Notes to Accounts of the Financial Statements of the Company.
The policy, has been hosted on the website of the Company can be viewed at https://www.sbilife.co.in/ policy-on-materiality-and-on-dealing-with-related-party-transact
18. IND AS IMPLEMENTATION
The IRDAI ("Authority") has issued a circular dated June 28, 2017, deferring the implementation of Ind AS in insurance sector in India for a period of two years to be effective from FY 2020-21. The said circular, however requires the submission of proforma Ind AS financial statements on quarterly basis.
The Company has submitted to the Authority, proforma Ind AS financial statements on quarterly basis in FY 2017-18.
The Authority has constituted a working group new standard on Insurance Contracts (equivalent to IFRS 17 Insurance Contracts) primarily to review the standard and to identify relevant areas/aspects which require suitable adoption in Indian context and changes in regulations/guidelines. Further, the Accounting Standards Board of ICAI issued the exposure draft of Ind AS 117 Insurance Contracts (equivalent standard to IFRS 17) on February 12, 2018.
19. BOARD OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
Change in Directors and Key Managerial Personnel''s (KMPs) during the year
|
Name of the Director / KMP |
Nature of change |
With effect from |
|
Ms. Arundhati Bhattacharya |
Resigned as Chairman |
October 06, 2017 |
|
Mr. Rajnish Kumar |
Appointment as Chairman |
October 07, 2017 |
|
Mr. P K Gupta |
Appointment as a Nominee Director |
March 23, 2018 |
|
Mr. Deepak Amin |
Appointment as an Independent Director |
July 13, 2017 |
|
Mr. Somasekhar Sundaresan |
Appointment as an Independent Director |
July 13, 2017 |
|
Mr. Arijit Basu |
Resigned as Managing Director and Chief Executive Officer |
March 10, 2018 |
|
Mr. Sanjeev Nautiyal |
Appointed as Managing Director and Chief Executive Officer |
March 10, 2018 |
|
Ms. Varsha Mondkar |
Ceased to be Chief of HR & Management Services |
July 25, 2017 |
|
Ms. Manjula Kalyanasundaram |
Appointed as Chief of HR & Management Services |
October 04, 2017 |
Retirement by rotation
In accordance with the provision of Section 152 of the Companies Act 2013, Mr. Gerard Binet (DIN: 00066024) would retire by rotation at the ensuing AGM, being eligible have offered himself for reappointment.
Key Managerial Personnel
Mr. Sanjeev Nautiyal (Managing Director & CEO), Mr. Sangramjit Sarangi (Chief Financial Officer) and Mr. Aniket Karandikar (Company Secretary) are designated "Key Managerial Personnel" of the Company, under the provisions of the Act. During the year Mr. Arijit Basu (Managing Director & CEO) has resigned and Mr. Sanjeev Nautiyal has been appointed as Managing Director & CEO w.e.f. March 10, 2018.
Declaration by directors
All independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.
The Company has also received declarations from all its Directors as per Section 164 of the Companies Act, 2013, confirming they are not disqualified from being appointed as Directors of the Company.
''Fit and Proper'' criteria
All the Directors have confirmed compliance with the ''fit and proper'' criteria, prescribed under the Corporate Governance Guidelines issued by the IRDAI.
Meetings
During the year, nine Board Meetings were convened and held, the details of which are given in the Report on Corporate Governance, which is forming a part of this report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013. A separate meeting of the independent Directors was held on March 23, 2018.
Audit Committee
The composition and the functions of the Audit Committee of the Board of Directors of the Company are disclosed in the Report on Corporate Governance, which is forming a part of this report.
Remuneration Policy
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board has approved the remuneration policy as recommended by the Board Nomination & Remuneration Committee. The details of the said policy are annexed as Annexure I to this Report.
20. CORPORATE GOVERNANCE
The Corporate Governance philosophy of the Company is to comply with not only the statutory requirements but also to voluntarily formulate and adhere to a strong set of Corporate Governance practices which includes code of business conduct, corporate ethics, values, risk management, etc. The Report on Corporate Governance is annexed and forms part of this Annual Report.
21. CORPORATE SOCIAL RESPONSIBILITY
The Company constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act 2013 read with The Companies (Corporate Social Responsibility) Rules 2014, which drives the CSR programme of the Company.
The CSR Committee of the Board confirms that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and Policy of the Company.
The brief outline of CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the financial year have been disclosed in Annexure II to this report, as mandated under the said Rules.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
I n line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated 13 February 2015, the provisions of Section 186 of the Companies Act 2013 relating to loans, guarantees and investments do not apply to the Company.
23. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint Ventures or Associate Company.
24. PERSISTENCY
Persistency is a critical indicator of business viability and brand success. During the FY 2017-18, SBI Life witnessed 32.4% growth in Renewal Premium collection at '' 143.88 billion in FY 2018, which contributed to 56.8% of Gross Written Premium. SBI Life has continued to focus on renewals and has undertaken initiatives to improve persistency of its existing policies. The independent Renewal Vertical is focusing on collection of renewal premiums and servicing policyholders. We shall continue to accord prime importance to this area.
25. RURAL AND SOCIAL SECTOR OBLIGATIONS
As per the regulatory requirements, SBI Life has met its Rural and Social Sector obligations for FY 2018. As against the minimum requirement of 20%, the Company has issued 23.7% policies in the rural sector which affirms the Company''s approach towards life insurance inclusion. Further, 649,599 new lives covered (13.14% of total new lives covered in preceding year) by the Company are from the underprivileged social sector as against the regulatory requirement of at least 5% of total lives covered in preceding year. Consequently, the Company has substantially exceeded the minimum social and rural regulatory norms.
26. MANAGEMENT REPORT
Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations 2000, the Management Report is placed separately and forms part of this Annual Report.
27. AUDITORS
I n views of the applicability of Section 139 of the Companies Act 2013, the Company comes under the purview of the Comptroller & Auditor General of India (C&AG). M/s L.S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, appointed by C&AG will retire at the conclusion of eighteenth AGM. M/s GMJ & Co., Chartered Accountants and M/s PSD & Associates, Chartered Accountants, are appointed as Statutory Auditors of the Company for the FY 2018-19 as advised by the C&AG in accordance with Section 139 of the Companies Act 2013.
28. AUDITOR''S REPORT
The Auditor''s Report (including annexure thereof) to the Members does not contain any qualification, reservation, adverse remark, or disclaimer hence do not call for any further comments u/s 134 (3) (f) of the Companies Act 2013.
29. COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE ACCOUNTS OF THE COMPANY
The Comptroller & Auditor General of India (C&AG) have conducted a supplementary audit u/s 143 (6) (b) of the Companies Act, 2013 of the accounts of the Company for the year ended March 31, 2018. The C&AG vide their report no. GA/ CA-I /Audit /SBI Life / 2017-18/ 75 dated July 13, 2018 have stated that there is nothing significant which would give rise to any comment upon or supplement to Statutory Auditors'' Report. The Report of C&AG is being placed with the report of Statutory Auditors of the Company.
30. SECRETARIAL REPORT
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed VV Chakradeo & Co., Company Secretary, Mumbai as the Secretarial Auditor of the Company.
The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his report for FY 2018. The detailed report on Secretarial Audit of the Company for FY 2018 is enclosed as Annexure III to the report.
31. ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 (as amended by the Companies (Amendment) Act, 2017), read with Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual Return (in form MGT 9) has been annexed as Annexure IV to this Report.
32. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.
33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY
During the financial year 2017-18, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operation in future.
34. DIRECTOR''S RESPONSIBILITY STATEMENT
I n terms of Section 134(3) (c) read with 134(5) of the
Companies Act, 2013 and the Corporate Governance
Guidelines, your Directors confirm that;
a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the accounts for the current financial year ended March 31, 2018 on a going concern basis;
e) t hey have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
35. PARTICULARS OF CONVERSATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
A. Conservation of Energy
In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134 (3) and Rule 8 (3) of Companies (Accounts) Rules, 2014, is not required to be given.
36. BUSINESS RESPONSIBILITY REPORT
B. Technology Absorption
|
Sr. |
Particulars |
Remarks |
|
|
No. |
|||
|
Research & Development (R&D) |
|||
|
1. |
Specific areas in which R & D carried out by the Company |
- |
Auto populating the data from the customers KYC proofs and the Bank instruments |
|
2. |
Benefits derived as a result of the above R&D |
- - |
Better quality of data Minimizing human intervention |
|
3. |
Future plan of action |
- |
Implementation of this technology under Mobile and Web based solutions. |
|
4. |
Expenditure on R & D: (a) Capital (b) Recurring (c) Total |
In-house development. |
|
|
(d) Total R & D expenditure as a |
|||
|
percentage of total turnover |
|||
|
Technology absorption, adaption and innovation |
|||
|
1. |
Efforts, in brief, made towards technology |
- |
Automated Online ''Chat Solution'' |
|
absorption, adaptation and innovation |
- |
Voice Search on website |
|
|
2. |
Benefits derived as a result of the above efforts, |
- |
Better Customer Service and Satisfaction |
|
e.g., product improvement, cost reduction, |
- |
Customer support 24*7 |
|
|
product development, import substitution, etc. |
- |
Instant reply to customer queries |
|
|
3. |
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: |
||
|
(a) Technology imported (b) Year of import (c) Has technology been fully absorbed? |
Nil |
||
|
(d) If not fully absorbed, areas where this has not |
|||
|
taken place, reasons there for and future plans |
|||
|
of action. |
|||
C. Foreign Exchange Earnings and Outgo
Details of foreign exchange earnings and outgo required under above Rules are as under:
|
('' billion) |
||
|
Particulars |
FY 2018 |
FY 2017 |
|
Foreign Exchange Earnings |
0.08 |
0.50 |
|
Foreign Exchange Outgo |
0.68 |
0.68 |
Business Responsibility Report as stipulated under Regulation 34 of the Listing Regulations form part of the Annual Report and is available on the website of the Company https://www.sbilife.co.in/en/about-us/ investor-relations/annual-reports
37. IRDAI LICENSE
The Insurance Regulatory and Development Authority of India (IRDAI) have renewed the annual license of the Company to continue the Life Insurance Business for the financial year 2018-19.
38. OTHER INFORMATION
A. Economic Capital:
The annual assessment of economic capital of SBI Life was carried out as on March 31, 2018. As part of this exercise, we have quantified the risk capital requirements relating to various risks such as Insurance Risks (Mortality risk, Lapse Risk, Expense Risk, etc.) and Noninsurance Risks (Market Risk, Operational Risk, etc). The cost of guarantee for the products wherever applicable, is also calculated. A large part of the SBI Life portfolio is now monitored using a stochastic ALM model. The aggregate economic capital requirement for the risks of the Company including the guarantees is well within the statutory capital requirement. The current Solvency coverage ratio (Assets / [Liability Other risk margins]) on an economic basis is 112%.
B. Solvency Margin:
The Directors are pleased to report that the assets of the Company are higher than the liabilities of the Company and the assets are more than sufficient to meet the minimum solvency margin level of 1.50 times, as specified in Section 64 VA of the Insurance Act, 1938 read with the IRDAI (Assets, Liabilities, and Solvency Margin of Life Insurance Business) Regulations, 2016. The Company has a strong solvency ratio of 2.06 as on March 31, 2018 (Previous year ended March 31, 2017: 2.04) as against the Regulatory requirement of 1.50.
C. IRDAI Directions
I RDAI has issued directions under Section 34 (1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 0.84 billion vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012. The Company had filed an appeal against the said order with the Ministry of Finance, Government of India, who remanded the case back to IRDAI on November 4, 2015. IRDAI issued further directions dated January 11, 2017 reiterating the directions issued on October 5, 2012. The Company has filed an appeal against the said directions/ orders with the Securities Appellate Tribunal. The said amount is disclosed as contingent liability as at March 31, 2018 in Schedule 16C (1) of the notes to accounts.
I RDAI has issued directions under Section 34 (1) of the Insurance Act, 1938 to refund the excess commission paid to corporate agents to the members or the beneficiaries amounting to '' 2.75 billion vide order no. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014. The Company has filed an appeal against the order with the Securities Appellate Tribunal. The said amount is disclosed as contingent liability as at March 31, 2018 in Schedule 16C (1) of the notes to accounts.
D. Appointed Actuary''s Certificate
The certificate of the Appointed Actuary on valuation and actuarial assumptions is enclosed in the financial statements.
E. Certificate from Compliance Officer (under the IRDAI Corporate Governance Guidelines)
A Compliance Certificate, for complying with IRDAI Corporate Governance Guidelines, issued by the Company Secretary, designated as the Compliance officer under the IRDAI Corporate Governance Guidelines, is enclosed and forms part of the Corporate Governance Report.
39. ACKNOWLEDGEMENTS
The Directors are grateful to the Insurance Regulatory and Development Authority of India (IRDAI), Reserve Bank of India (RBI), Comptroller and Auditor General of India (C&AG), Securities and Exchange Board of India (SEBI) and Government of India (GOI) for their continued co-operation, support and advice. The Directors would also like to take this opportunity to express their sincere thanks to the valued customers and shareholders'' for their trust and patronage.
The Directors also express their gratitude for the advice, guidance and support received from time to time, from the auditors, and statutory authorities. The Directors expresses their deep sense of appreciation to all the employees, insurance advisors, corporate agents and brokers, distributors, re-insurers, bankers and the Registrars who continue to display outstanding professionalism and commitment, enabling the organization to retain market leadership in its business operations. The Directors also wish to express their gratitude to the State Bank of India, BNP Paribas Cardif, Temasek, KKR and all stakeholders for their continued support and trust.
For and on behalf of the Board of Directors
Rajnish Kumar
Chairman
Place: Mumbai
Date: July 26, 2018
Mar 31, 2017
Directors'' Report
To,
The Members of
The SBI Life Insurance Company Limited
The Directors are pleased to present their 17th Annual Report along with audited financial statements of SBI Life Insurance Company Limited ("SBI Life" or "the Company") for the year ended March 31, 2017.
1. FINANCIAL RESULTS HIGHLIGHTS
This was another year of successful operations for the Company. The Company has earned a Gross Written Premium of Rs, 210,151.35 million driven by a strong growth in Individual business. The Company continued meeting its stakeholders'' expectations achieving profitable growth year on year.
The summary of the financial performance of the Company for FY 2016-17 is presented below:
(Rs, million)
|
Particulars |
¦ FY 2017 ¦ |
FY 2016 |
|
Financial Parameters |
||
|
Premium income |
210,151.35 |
158,253.65 |
|
⢠New Business Premium |
101,438.62 |
71,065.76 |
|
⢠Renewal Premium |
108,712.72 |
87,187.89 |
|
Profit / (Loss) before taxation |
11,544.03 |
10,270.62 |
|
Provision for taxation |
1,997.50 |
1,660.28 |
|
Profit / (Loss) after taxation |
9,546.53 |
8,610.34 |
|
Profit at the beginning of the year |
36,906.65 |
29,740.60 |
|
Total profit available for appropriation |
46,453.18 |
38,350.94 |
|
Appropriations : |
||
|
Interim dividend (Including dividend distribution tax) |
1,805.36 |
1,444.29 |
|
Profit carried to the balance sheet |
44,647.82 |
36,906.65 |
|
Earnings per equity share: |
||
|
Basic & Diluted |
9.55 |
8.61 |
|
Book value per share |
55.52 |
47.33 |
|
Individual Rated Premium |
59,361.23 |
42,759.93 |
|
New Business Annualized Premium Equivalent |
67,273.18 |
50,455.49 |
|
Assets under management (AUM) |
977,366.03 |
798,275.78 |
|
Net worth |
55,520.79 |
47,331.01 |
|
Key performance indicator: |
||
|
Operating Expense ratio |
7.83% |
9.21% |
|
Commission ratio |
3.73% |
4.51% |
|
Solvency ratio |
2.04 |
2.12 |
|
Persistency ratio (13th month on premium basis) |
81.07% |
80.69% |
|
Number of new policies (in 000Rs,s) |
1,275.50 |
1,273.52 |
2. HIGHLIGHTS OF RESULTS AND STATE OF COMPANY''S AFFAIRS
The Company witnessed a growth and consistent performance in FY 2016-17. The key financial parameters of the Company are as follows:
The Company has achieved New Business Premium (NBP) of Rs, 101,438.62 million and a market share of 20.04% amongst private players, which is 270 basis points higher than previous year
Registered a growth of 42.74% in NBP with Individual Regular business growing by 40.00% to Rs, 58,770.06 million against Rs, 41,979.53 million in previous year
Overall market share in new business increased to 5.80% in FY 2016-17 from previous year''s 5.13%
Individual Rated Premium stands at Rs, 59,361.23 million growing at 38.87% over previous year
New Business Annualized Premium Equivalent (APE) stands at Rs, 67,273.18 million growing at 33.33% over previous year
Renewal premiums of Rs, 108,712.72 million was 24.69% higher than that of Rs, 87,187.89 million in FY 2015-16
Total Gross Written Premium (GWP) collected was Rs, 210,151.35 million registering a growth of 32.79% over previous year''s GWP of '' 158,253.65 million
The CompanyRs,s profit after tax grew by 10.87% and stands at Rs, 9,546.53 million in FY 2016-17 against Rs, 8,610.34 million in FY 2015-16
The operating expense ratio (Operating Expense to GWP) stands at 7.83% which is 138 basis points less than that of previous year
The Company''s Assets Under Management (AUM) registered a growth of 22.43% to '' 977,366.03 million from '' 798,275.78 million in FY 2015-16.
Solvency ratio of the Company stands at 2.04 as against the regulatory requirement of 1.5 indicating the strong & stable financial health of the Company.
The 13th month persistency ratio (based on premium) improved to 81.07% in FY 201617 from 80.69% in FY 2015-16.
The Company declared an interim dividend of Rs, 1.50 per share at 15.00% of paid up equity capital in FY 2016-17 amounting to Rs, 1,805.36 million (including dividend distribution tax).
Embedded Value as on March 31, 2017
The Company also declared its Indian Embedded Value and New Business Margins as on March 31, 2017 based on Embedded Value report issued by the Independent Actuary
Indian Embedded Value of the company stands at Rs, 165,379 million, as on March 31, 2017
The Value of New Business stands at Rs, 10,368 million
The Value of New Business Margin as a percentage of Annualized Premium Equivalent was 15.4% and as a percentage of Present Value of New Business Premium was 3.8%
Embedded Value Operating Profit was Rs, 28,875 million and our Operating Return on Embedded Value was 23%
Distribution reach
Company''s multi-channel distribution network includes bancassurance, individual agents, direct sales and sales through corporate agents, brokers, insurance marketing firms and other intermediaries.
Bancassurance represents Company''s largest distribution network and in FY
2015-16 and FY 2016-17, contributed 54.43% and 53.03%, respectively, of our total New Business Premium in such periods. The Company also reported a year-on-year growth rate of 38.42% in Individual New Business Premium generated through banc assurance channel.
Individual agent has contributed 27.47% and 22.31%, respectively, of our total New Business Premium in FY
2015-16 and FY 2016-17. As of March 31, 2017, we had 95,355 individual agents. In FY 2016-17, individual agent network generated New Business Premium of '' 234,501 from individual products per agent, reflecting the
highest productivity among all private life insurers in India.
The Company''s direct sales primarily comprising sale of group products, as well as standardized individual products sold through online offerings. In FY 2015-16 and FY 2016-17, other distribution channels, including direct sales, sales by non-bancassurance corporate agents, brokers, microagents, common service centres and insurance marketing firms, contributed 18.10% and 24.66%, respectively, of our total New Business Premium in such periods.
We have supported our various distribution channels by operating through 801 offices as of March 31, 2017, and increasing the number of sales and customer support employees to support our sales channels. The full time employee base has grown by 10.94% from 10,863 as of March 31, 2016 to 12,051 as of March 31, 2017, reflecting the overall growth in scale of our operations.
The Company continues to emphasize on the expansion of its distribution reach by opening new offices, quality recruitments and registering new individual agents and CIFs.
The Company intend continue to explore opportunities to expand our operations in South Asia including in Nepal and Bangladesh and have obtained necessary regulatory approvals for starting operations in Bahrain.
3. INDUSTRY AND COMPANY OUTLOOK
The life insurance industry in India is growing consistently after the phase of regulatory reforms in early part of the decade. Industry growth rates are also improving with industry''s new business growth seen at 26% in FY 2016-17. Private life insurers have opportunities to grow in this phase with private industry recording a growth rate of 21% between FY2014-15 to FY 2016-17.
India''s life insurance industry is still highly under penetrated. With such a huge population and favorable demographic situation, the industry has a lot of potential to grow. The growth of the industry rests on life insurer''s ability to innovate in product development to provide relevant personalized solutions, adopting digital tools to reduce cost to serve and responsiveness towards customers, customer education and awareness efforts and regulatory support to encourage transparency and accountability in the business practices to build trust amongst customers. Given the right products and processes, there is no dearth of capital or customers in this business.
Life insurance industry is also supported by government policy actions and reform measures which are aimed at financial inclusion, clean up and consolidation of banking sector, more foreign investment friendly measures, better tax compliance, and digital connectivity. These efforts are driving the investments in the country and keep growth prospects strong. Industry is witnessing more investors coming and consolidation exercises which might help major insurers to consolidate their business.
Additionally, the regulator has initiated several changes for the life insurance sector such as expenses of management, corporate governance, convergence to the Indian Accounting Standards, etc.
With several changes in regulatory framework which are expected to further change in the way the industry conducts its business and engages with its customers. Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance sector.
I n current year, the Company has continued to show robust growth in terms of new business premium as well as renewal premium collections.
While customer centricity remains the main focus, various initiatives continue to gather steam across the board, ranging from customer education initiatives, customer-connect campaigns, revival campaigns to ISO certifications, product innovations etc.
The Company intends to further strengthen its Ban assurance model. This will be achieved by leveraging State Bank of India''s widespread branch network and equipping select branches with requisite resources including manpower support which would result in higher cross sell penetration.
4. DIVIDEND AND RESERVES
The board at its meeting held on March 22, 2017 has declared an interim dividend of Rs, 1.50 per equity share (previous year Rs, 1.20 per equity share) which amounts to a total pay-out of Rs, 1,805.36 million including dividend distribution tax (previous year Rs, 1,444.29 million). No final dividend is recommended for the year ending March 31, 2017 and interim dividend declared is to be confirmed as final dividend.
The Company has carried forward Rs, 44,647.82 million to its reserves.
5. CAPITAL
The shareholding pattern during the year under review is in compliance with the statutory requirement. There was no fresh capital infusion by the promoters in the Company during the financial year 2016-17. The authorized and paid up share capital of the Company stands at Rs, 20,000 million and Rs, 10,000 million. respectively. The shareholding pattern of SBI Life as on March 31, 2017 is available under Schedule - 5A which forms part of the Financial Statements.
During the year under review, the Board of Directors of the Company approved the steps to initiate process for an Initial Public Offering (IPO) of the Company by way of an "offer for sale" by the promoter companies. This is subject to relevant regulatory and other approvals, as applicable. The Company has filed a Draft Red Herring Prospectus (DRHP) with Security Exchange Board of India (SEBI) dated July 17, 2017 and a copy of the DRHP is available on the website of SEBI and the Book Running Lead Managers (BRLMs)
6. DEPOSITS
During the year under review, the Company has not accepted any deposits from the public as per
Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules,
2014.
7. AWARDS & RECOGNITIONS
Won the Golden Peacock National Quality Award-2016
Won "Life Insurance Company of the Year" at the Indian Insurance Awards 2016 organised by Fintelekt.
Won "Bancassuracne Leader Life Insurance (Large Category)" at the Indian Insurance Awards 2016 organised by Fintelekt.
Won ''LIMRA and LOMA Social Media Silver Bowl Awards 2016Rs, for best use of social media by a Company outside of the United States at the Social Business Conference for Financial Services in Boston, Massachusetts.
Adjudged one of the "Most Trusted Brand, 2016" for the sixth consecutive year by The Economic Times Brand Equity - Nielsen survey.
We believe that each of the awards demonstrates Company''s commitment to achieve excellence, across all spheres of its activities and operations. We owe these awards to the constant support and trust reposed by our Policyholders and Stakeholders and the hard work and dedication of our work force.
8. PRODUCTS
SBI Life has a wide range of products catering to various customer needs in the life, health, pension & micro-insurance segments. The products are customer centric, simple to understand and have competitive features.
To maintain its competitive edge in the market, the Company had launched two new individual products and nine existing individual products with modifications in the financial year 2016-17.
The details of the new products launched in 2016-17 are as follows:
1) SBI Life - Smart Privilege (UIN: 111L107V01): This is an individual, linked, non- participating product.
2) SBI Life - Smart Bachat (UIN: 111N108V01): This is an individual, no linked, with-profits endowment assurance product.
9. CUSTOMER AND PARTNER SERVICE ENABLEMENT
The Company continues to focus on improving customer''s experience of SBI Life at every touch point. Last year, the Company introduced many initiatives in the areas of customer service delivery, process automation, business process and quality improvements. This year also the Company has introduced some new initiatives and process improvements to further reduce the turnaround time (TAT) and simplify customer service with specific focus on customer self-service. Some of these initiatives are described below:
A. Policy Serving
Premium collection through digital medium: In our endeavour to push digital transactions, the Company has started premium collection through various e-Wallets and Unified Payment Interface (UPI). Now policy holders can pay renewal premiums through SBI Buddy, Jio Money, Airtel Money, m-Pesa, UPI, etc.
Workflow automation: The Company has launched workflow solution for payouts like Free-look Cancellation, Partial Withdrawal and Policy Deposit refund, which has automated and streamlined the payout processes. The workflow module ensures speedy closure of customer service request and has improved overall operational efficiency.
Revival Mela: Two special revival campaigns were launched during the FY 2016-17 with the motive of revival of lapsed policies and rebuilding the relationship with our policyholders.
"Ankur" A Go Green initiative: To bring about an impact on environment and to engage with customer effectively, the Company has been driving registrations for e-communications for last 2 years. During this year, the Company has launched a campaign "Ankur" whereby a tree is planted in the name of the policy holder if he/she registers for Go Green. The Company had planted 50,000 trees vide this campaign and sent e-certificates confirming the plantation of a tree. Overall with Go Green initiative, the Company has sent 61.14 lakh communications through emails.
Surrender Prevention: Following the Surrender Management and Retention Tool introduced last year, a SMART Campaign was launched in FY 2016-17 to reward and recognize branches for focussing on surrender prevention and retaining the customer from premature closure of the policy.
Predictive Analytics of renewal database: In order to make the Renewal collection process more proactive and cost effective, the Company used Data Analytics this year to identify key factors that influence customers'' intentions of paying premiums and classified customers into different categories for renewal follow-up. This has helped in overall achievement of annual renewal budget and also increased collection efficiencies.
B. Customer Engagement
The second year of the Customer Engagement Department has been an exciting journey which saw the advent of multiple strategic initiatives to connect with our customers in a much professional, yet personal manner. Apart from the customer awareness campaigns that the Company executed through email and SMS to spread awareness on Life Insurance policies and engaging with the customers on their Birthday and Policy Anniversary, other initiatives like personalizing the issuance email to customers, introducing missed call service for policyholders'', SMS based feedback after a service is availed by the customer, mapping our processes to industry practices through mystery shopping, focused and structured C-Sat surveys and its learning being deployed in existing processes for course corrections are some key highlights during the FY 2016
17. The HNI Cell continues to ensure faster processing of HNI proposals and priority processing of servicing requests.
Project Anubhav has started taking shape and this will lend the organization the required impetus to create the Brand Value to give the edge to SBI Life for generating appropriate mileage from the FY 2017-18 onwards.
C. Underwriting
Creation of Regional Underwriting Units: Regional Underwriting Units (RUU) has been created as per Risk Management Committee recommendations. Training has been imparted to RUU underwriters regularly throughout the year both through class room training at RUU locations and through VCs. In-house diary module built with the help of IT for effective distribution and assignment of cases. Vendor has been appointed for Underwriting Medical case sheet preparation which saves time of the underwriters both at RUU and CPC level. RUU is now successfully functioning at all regional level locations.
Enhancement in Auto-UW rules to increase auto-underwriting percentage. Auto underwriting success rate increased from 11% in April 2016 to close to 50% by March 2017. Vendor has been appointed for image and data verification of auto-underwriting proposals to check correctness of output.
Modification in Smart Advisor application - Inquiryon the move: Under this initiative complete information suite has been made available inside "Smart Advisor". Following features have been added in the application which has helped the sales personnel in tracking and quick processing of their proposals.
Proposal Tracker: The user can check status of proposals introduced by him. There will be no need to visit SBI or SBI Life branch. Apart from status of the proposal (In-force / Postpone / Decline / Cancelled), they are also able to see the open requirements both medical as well as non-medical.
Document Upload facility: For non-medical requirements user will have an option to upload the images of requirement documents. There is an option to click and save the images and then the same can be uploaded by using "Document Upload" option. Physical document can be submitted subsequently for record purpose.
PIWC Status: This option allows the user to know the Pre Issuance Welcome Call (PIWC) status i.e., whether PIWC is cleared or not cleared. Soon the option will be made available giving list of proposals pending at various stages of PIWC.
Facility to broadcast information:
One pager abridged guidelines is issued on financial underwriting and made available on Smart Advisor for the ready reference of the sales team.
The Company has formed a tie-up with Multi-specialty hospitals in 8 cities for offering differentiated services for HNI customers. Services are currently available in 78 hospitals in all these cities.
D. Group Operations
Group Corporate Portal
Enabled Group Corporate Portal (Dew Drops) in SBI Life website for master policy holders of Kalyan ULIP wherein the master policy holder can view details of contribution, claims paid and fund balance
Enabled Group Corporate Portal for master policy holders of Sampoorn Suraksha (Group term Insurance) policies wherein the master policy holder can view member wise policy details and claims settlement.
Group Customer Portal
Facility for online generation of PMJJBY Certificate of Insurance and renewal premium receipts to the customers.
Facility for the nominee/claimant to check the PMJJBY claims status.
The portal was revamped and additional information and additional facilities like generation of Certificate of Insurance etc. was made available to the Group Customer.
E. New Business
Additional Pages in Policy Documents:
The Policy Document was revised and additional documents along with the copy of proposal form are sent to the customer from the FY 2016-17. The documents submitted to comply with Know Your Customer (KYC) norms and Benefit Illustration signed by the customer is inserted and sent along with the revised Policy Document. This will help the customer to know the document submitted to the Company at the time of buying the policy and bring in transparency in the process.
Image Flow: The scanning software used by the vendor at branch offices was upgraded with Image Flow. Image Flow is a software developed in-house and has additional features compared to the one used by the vendor. The software is user friendly and has the feature of auto indexing and image quality sliders to improve the effectiveness of scanning.
ePolicy Bond: The Policy Documents is now available to our policy holders in electronic form and it can be downloaded from the SBI Life website. The softcopy of the policy document
can be downloaded by inputting the policy number and date of birth of the proposer. A One Time Password (OTP) will be sent to the customer''s registered mobile number which should be used to view and download the soft copy of policy document.
10. CUSTOMER GRIEVANCE REDRESSAL
The Company has put in place a Grievance Redressal Policy which is reviewed annually and status update of compliance is placed before the Board/Management. This policy document lays down various provisions, systems and procedures to ensure prompt redressal of customer grievances through a well-defined structure.
In accordance with IRDAI''s Corporate Governance Guidelines, the Company has formed a committee called the Policyholders'' Protection Committee with a view to address various compliance issues relating to protection of the interests of policyholders, and to keep the policyholders well informed and educated about insurance products and complaint-handling procedures. The Committee is responsible for putting in place proper procedures and effective mechanism to address complaints and grievances of policyholders. Our Customer Grievance Redressal process has been successfully certified for ISO 10002 standards.
The Company''s Grievance Redressal Management System is fully integrated with ''Integrated Grievance Redressal Management System'' (IGMS) of IRDAI. IGMS provides online view of customer complaints and the related turnaround time. The IGMS also facilitates escalation of complaints, where necessary.
The policyholder can approach the Company through any medium like letters, emails, phone calls, text messages, toll free numbers or directly approach any of the SBI Life branches for redressal of grievance. Grievance officers have been nominated for all the Branch Offices, Regional Offices and the Company. If the customer is not satisfied with the resolution provided by the branch, policyholder can contact the customer care desk at SBI Life Regional Office. The policyholder can also seek redressal with Head -Client Relationship at SBI Life Central Processing Centre. The contact details are provided in the policy document and on the SBI Life website. The details of grievance disposal are as under:
|
Particulars |
FY 2016-17 1 |
FY 2015-16 |
|
Opening balance at the beginning of the year |
7 |
13 |
|
Add: Additions during the year |
7,806 |
9,510 |
|
Less: Complaints resolved during the year |
(7,810) |
(9,516) |
|
Complaints pending at the end of the year |
3 |
7 |
11. CLAIMS
Claims Management is a very important aspect of insurance business. At SBI Life, Customer Relationship at claims stage is built by providing efficient services, striving to exceed the customer expectations and creating avenues for widening self service facilities, including setting up of programmes for effective resolution of customer grievances. In FY 2016-17 the overall Claim settlement ratio has improved to 97.98% as compared to 95.77% in FY 2015-16.
Initiatives taken by Claims Department during the FY 2016-17
Claims Predictive Analytics model: This model enables us to detect potential fraud cases. Risk score and rating factor i.e. High Risk, Medium Risk and Low Risk provided by predictive analytics model and can be used as reference tool in assessment of Claims.
Shat Pratishat - 100% initiation of Living Benefits Claims Competition: With a view to encouraging regions to increase their settlement ratio of living benefit claims, a competition launched for the regions, exclusively for the months of February & March 2017. The scope of the competition includes cases (Maturity and Survival Benefits), due from the period of April 01, 2016 to March 31, 2017 (including the outstanding dues of previous financial years) and the basis for qualification would be percentage initiated out of this base during the financial year.
Business Process Management (BPM) platform for Annuity pay-outs: Workflow module designed for processing of Annuity claims under individual policies. This module will facilitate better control and monitoring of the entire Annuity claims process for individual products
All India Investigators'' Meet conducted twice i.e. on September 23, 2016 & February 20, 2017. The purpose of the meet was to sensitize the Investigators about our expectation regarding the quality of investigation and to share our concerns.
Scanflow for Living Benefit Claims: This enhancement enables paperless processing of living benefit claims. Now, branches and PC''s can scan and upload documents received for living benefit claims through Scan flow module.
C & R module in E-Sampark for Claims:
Cancellation and Reissuance (C&R) module enhanced for reprocessing of payment (Stale cheques/ EFT rejections). This feature enables end to end reprocessing of payment and helps us to track of all C&R cases for future reference.
Enhancement of Credit Account Statement on Banca Online: Banca team is now able to access Credit Account Statement directly from Banca portal which can be filled at the time of claim intimation itself. This will help us to reduce the TAT of further requirement.
Claims Training: This is arranged for all employees of claims department to ensure no lack of process or product knowledge. A yearly training calendar is prepared to regularize training process.
Automation of Fund Transfer request:
Earlier, the Clams department used to send requisition for cheque for Fund Transfer cases. The cheque used to be then dispatched to branches or handed over to Policy Servicing department for cashiering against the new proposal. Now, the Claims department have changed the practice of issuing cheques for fund transfer cases and started sending requisition for direct credit to SBI Life''s account. Accounts team processes the same and provides Claims team with the UTR numbers for the transactions, which is shared with Policy Servicing department for initiating cashiering against the new proposal. This process helps in eliminating the cost involved in printing and despatch of cheque. Also, there is substantial decrease in TAT of overall process of Fund transfers.
Claim presence on Digital Platform:
Smart Advisor Mobile App - Enhancement of Living Benefit (LB) Dues Alerts incorporated in Smart Advisor Mobile App. This will enable Advisor''s / CIF''s to track their respective customer''s dues in advance and will help us to get the requirements on time leading to increase in LB Settlement Ratio.
Claims Corner link (Containing the process of claim forms to be used, etc. from our web page) has been enabled on Easy Access and Smart Advisor Mobile App
12. INFORMATION TECHNOLOGY
Technology innovations at SBI Life is aligned to the pace with change in technology globally and focused to deliver convenience for customer service with omni channel experience. Some of such major enhancements / initiatives taken up and in progress are given below:
Infrastructure
As a part of IT modernization, replacement of Core PMS (Policy Management System) Project initiated with Ingenium for which we have partnered with an established technology provider. Phase 1 got successfully implemented during the year
2016-17 and Phase 2 of the implementation is in progress.
Process Area
With a focus on customer centricity, Digital Initiatives were taken up / initiated. The key areas focussed on include:
New CRM System implementation process is in progress which will provide the 360 degree view of the customers at SBI Life Branch Offices. This will help the branches to service the customers better. This project is targeted for go live during first quarter of next financial year.
As a part of digitization of new business process Work Flow implementation was taken up and is targeted for second quarter of next financial year. This will improve scalability of operations through automation and manage growth with reduced processing time. This entails use of Intelligent Technology to ensure that a substantial volume of new business would be processed through technology without much human intervention.
Website refresh project will enable web experience management of online customers. It will enable our marketing teams and business users to easily create and manage contextually relevant social and interactive online experiences across multiple channels on a global scale to drive sales and loyalty. This website refresh is targeted for the second quarter of next financial year.
13. INVESTMENTS
Market witnessed testing times both domestic and internationally, but gave good returns at the end. Both debt and equity had headwinds of US interest rate starting to rise, Brexit results haunting and the outcome of US presidential results to look at. On the domestic side, it was hardening of commodity prices and demonetization led growth impact. Country witnessed good economic growth, stabilized its external account and strengthened rupee towards the end and gave stellar returns in equity and debt markets. GDP grew 7.1%, CAD ended at 1.1% of the GDP, INR strengthened by 2% at 64.85, Sensex gave a return of 17% and 10-year bond yield softened by 77 basis points.
Yield on 10-year Government of India Bond eased by 77 basis points to 6.69% (31.3.2017) as Reserve Bank of India reduced the policy interest rates by 50 basis points on account of lower trajectory of inflation. 10 year reached a level of 6.11% in Q1 of 2017. Global events like the Brexit triggered the slide in sovereign yields and Indian bonds were no exception.
Creation of the Monetary Policy Committee (MPC) in line with global best practices has increased the credibility of the central bank. MPC and RBI have taken up the mantle with immense commitment and made inflation targeting their solitary and unswerving goal. The NK Singh committee revamped the Fiscal Responsibility and Budget Management (FRBM) act and made noteworthy recommendations on the trajectory of debt-GDP ratio and fiscal deficit-GDP ratio over the next 6 years.
The Assets under Management (AUM) increased by 22.43% to '' 977,366.03 million as on March 31, 2017 from '' 798,275.78 million as at March 31, 2016. The AUM was made up of '' 531,635.70 million of traditional funds (including shareholders'' funds) and '' 445,730.38 million of Unit Linked Funds. The Unit linked portfolio majorly comprises of equity funds and NAV guaranteed funds. The performance of both traditional and unit linked funds was satisfactory with majority of funds, equity and bond funds comfortably beating the benchmark and their respective peers.
14. PARTICULARS OF EMPLOYEES
SBI Life has completed 16 years of being in business. The year 2016-17 has witnessed a change management strategy which has aimed to align People, Process and Technology initiatives being in sync to our business strategy and vision. This transformation has been the outcome of the persistent focus and effort that the management team along with the Company''s entire workforce has put in pursuing its strategy. Along with a shift in strategy comes a fundamental shift in roles and responsibilities. Marching towards a flat organization structure, we are focussing on employee involvement through a decentralized decision-making process and promoting self-managing teams. Our workforce is a balanced mix of experience and techno-functional. SBI Life family has grown from 10,863 employees as on March 31, 2016 to 12,051 employees as on March 31, 2017 which depicts a growth of 10.94%.
While the average age of employees is 34.8 years, the average tenure comes up to 4 years 1 month. There was a huge focus on alignment of goals across the organization, communication and leadership development initiatives that have led to strong improvement in business. To take the Company''s talent management initiatives to the next level, various projects to increase effectiveness of HR subsystems like talent acquisition, Learning and Development, succession planning, employee communication, etc. are being undertaken.
Placing higher emphasis on employee engagement activities, the Company promotes an open and progressive environment. Senior management interacted with the employees at the grass root level through Town Halls conducted at various locations. Communication within regions grew stronger through the Regional E-Magazine initiative which was launched to provide regions with a platform to share macro and micro level information including employees'' and teams'' accomplishments with all the employees on a monthly basis. Other initiatives like Sangam (Annual Day celebrations), cross functional offsite and corporate dinners were also organized for the employees to encourage team bonding and camaraderie within the SBI Life family. We are working on sustaining our outperformance in the industry by redefining our strategy to improve employee satisfaction and customer connect.
In accordance with the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.
15. RISK MANAGEMENT
SBI Life is in the business of covering life risks on payment of a premium. Risk Management therefore becomes an integral part of its business activities. The Company recognise and manages its risks in a proactive, ongoing and positive manner. Risk philosophy of the Company is outlined in the Risk Management Policy. The Risk Management policy specifies the process for identification, measurement and analysis of the Company''s risk exposures; develop risk management strategies and its monitoring. The Risk Management Policy is supported by various other policies pertaining to insurance, market, compliance, outsourcing, fraud, information security and business continuity management. All the above policies are reviewed by the Risk Management Committee of the Board on an annual basis.
The Company has formulated risk appetite statements at the corporate as well as the functional level, which are reviewed and monitored by the Board level Risk Management Committee and Internal Risk Management Committee respectively. The Company also carries out an ICAAP (Internal Capital Adequacy Assessment Process) activity, which details the assessment of material risks, estimation of capital requirement and adequacy for maintaining solvency requirements.
The British Standard Institute has stated that the Company''s enterprise risk management system, which covers all departments and functions at its corporate offices, central processing centre, as well as regional and branch offices, meet the recommendations of ISO 31000:2009 standards. The Company''s Business Continuity Management System (BCMS) is ISO 22301 certified and its Information Security Management System (ISMS) is ISO 27001 certified.
More information on the risk practices adopted by the Company is available in the ''Enterprise Risk Management'' section appended to this report.
16. INTERNAL AUDIT FRAMEWORK
The Company has in place a robust internal audit framework developed with the risk based audit approach and it commensurate with the nature of the business and the size of its operations. The internal audit plan covers the process audit as well as transaction based audits at the Head office, Regional Office and across various branches of the Company.
The audits are carried out by the internal audit team of the Company and also by the independent Chartered Accountants firms. The approach of the audit is to verify compliance with the regulatory, operational and system related procedures and controls. Key audit observation and recommendations made by the internal auditors are reported to the Board Audit Committee of the Company. It is ensured that the recommendations made by the auditors are implemented by various departments.
17. INTERNAL FINANCIAL CONTROLS
The Company has aligned its internal financial control system with the requirements of the Companies Act 2013, on lines of globally accepted risk based framework as issued by Committee of Sponsoring Organizations (COSO). The internal control framework is intended to increase transparency and accountability in an organization''s process of designing and implementing a system of internal control. The framework requires the Company to identify and analyse risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness.
The Company''s internal financial control framework is based on ''three lines of defence model''. The Company has laid down standard operation procedures and policies to guide the business operations. The Company has a well-defined delegation of power with authority limits for approving revenue and capital expenditure. Statutory, Concurrent and Internal Auditors undertake rigorous testing of the control environment of the Company.
The Company has a Chief Internal Auditor with a dedicated internal audit team which is commensurate with the size, nature and complexity of operations of the Company.
The Company also undergoes an independent internal/concurrent audit by specialised third party professional consultants to review function specific regulatory compliances as well as internal controls.
The audit committee reviews reports submitted by the Management and audit reports submitted by the internal auditors and statutory auditors. Suggestions for improvements are considered and the Audit Committee follows up on corrective actions. The Audit Committee also meets the Company''s statutory auditors to ascertain their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations, if any periodically.
Auditor''s Report
There is no qualification, reservation, adverse remark or disclaimer made by the auditors in their report on Internal Financial Controls.
18. RELATED PARTY TRANSACTIONS
The Company has related party transaction policy to regulate the transactions with its related parties. As per the policy, all related party transactions require approval of the Audit Committee of the Board. As per Rule 6A of the Companies (Meeting of Boards and its Powers) Rules 2014, the Audit Committee may grant omnibus approval for related party transaction proposed to be entered into by the Company subject to terms and conditions mentioned in the said Rule.
All the Related Party Transactions entered into during the financial year were on arm''s length basis and in ordinary course of business. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval.
M/s. L.S. Nalawaya & Co., Chartered Accountants, reviewed the related party transactions for each quarter, and their report is placed at the meeting of the Board Audit Committee, along with details of such transactions.
All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 36 of Schedule 16(C) - Notes to Accounts of the Financial Statements of the Company.
19. IND AS IMPLEMENTATION
The Ministry of Corporate Affairs (MCA), Government of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015. Subsequently, IRDAI (the "Authority") has issued a circular on "Implementation of Indian Accounting Standards (Ind AS) in insurance sector", on March 01, 2016, requiring insurance companies to prepare and execute the implementation of Ind AS.
The circular requires all insurers to comply with the Ind AS based financial statements for FY 2018-19 with comparatives of FY 2017-18. The Insurers also needs to submit proforma Ind AS financial statements to the Authority from the quarter ended December 31, 2016 onwards.
In compliance with the above circular, the Company has formed a cross functional Steering Committee for Ind AS implementation, prepared the roadmap for implementation of Ind AS and got it approved from the Board, appointed the consultant for Ind AS implementation and has completed the gap analysis of current accounting policies and practices and the requirements of Ind AS.
The Implementation Group of Ind AS in insurance sector has submitted its report to the Authority on December 29, 2016 addressing the implementation issues and facilitates formulation of operational guidelines to converge with Ind AS. The Authority has also issued an Exposure draft of Insurance Regulatory and Development Authority of India (Preparation of Financial Statements of insurers), Regulations, 2017 on March 15, 2017 inviting the comments on the same; the Company has submitted its comments to the Authority. The Authority has issued a circular dated June 28, 2017, deferring the implementation of Ind AS in insurance sector in India for a period of two years to be effective from FY 2020-21. The said circular, however requires the submission of proforma Ind AS financial statements on quarterly basis.
The Company has submitted to the Authority, proforma Ind AS financial statements for the period ended December 31, 2016 and year ended March 31, 2017 as per the report of Implementation Group on Ind AS in insurance sector.
20. BOARD OF THE DIRECTORS AND KEY MANAGEMENT PERSONNEL
Directors
The composition of the Board of Directors of the Company is an optimum combination of Independent and Non-Independent Directors. The Board has strength of ten Directors as on March 31, 2017 of which four are Independent Directors and six Non-Independent Directors which includes one Executive Director.
During the year under review, Mr. V. G. Kannan ceased to be a Director w.e.f. July 30, 2016 due to his superannuation from SBI. The Board placed on record its sincere appreciation for the valuable services and guidance provided by Mr. V. G. Kannan during his tenure as an Independent Director.
Mr. Dinesh Khara was appointed on the Board of SBI Life as Nominee Director of SBI w.e.f. October 19, 2016.
In terms of Section 152 of the provisions of the Companies Act 2013, Mr. Pierre de Portier de Villeneuve would retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.
Mr. Deepak Amin and Mr. Somasekhar Sundaresan have been appointed as Additional Independent Directors on the Board of the Company with effect from July 13, 2017.
Meetings
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were convened and held, the details of which are given in the Report on Corporate Governance, which is forming a part of this report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013.
Key Managerial Personnel
Mr. Arijit Basu (Managing Director & CEO), Mr. Sangramjit Sarangi (Chief Financial Officer) and Mr. Aniket Karandikar (Company Secretary) are designated "Key Managerial Personnel" of the Company, under the provisions of the Act. There were no changes in the Key Managerial Personnel during the FY 2016-17.
Audit Committee
The composition and the functions of the Audit Committee of the Board of Directors of the Company are disclosed in the Report on Corporate Governance, which is forming a part of this report.
Remuneration Policy
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board has approved the remuneration policy as recommended by the Board Nomination & Remuneration Committee. The details of the said policy are annexed as Annexure I to this Report.
21. CORPORATE GOVERNANCE
The Corporate Governance philosophy of the Company is to comply with not only the statutory requirements but also to voluntarily formulate and adhere to a strong set of Corporate Governance practices which includes code of business conduct, corporate ethics, values, risk management, etc. The Report on Corporate Governance is annexed and forms part of this Annual Report.
22. CORPORATE SOCIAL RESPONSIBILITY
The Company constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act 2013 read with The Companies (Corporate Social Responsibility) Rules 2014, which drives the CSR program of the Company.
The CSR Committee of the Board confirms that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and Policy of the Company.
The brief outline of CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the financial year have been disclosed in Annexure II to this report, as mandated under the said Rules.
23. PARTICULARS OF LOANS , GUARANTEES OR INVESTMENT
In line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Companies Act 2013 relating to loans, guarantees and investments do not apply to the Company.
24. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company does not have any Subsidiary, Joint Ventures or Associate Company.
25. PERSISTENCY
Persistency is a critical indicator of business viability and brand success. During the FY 2016-17, SBI Life witnessed a Renewal Premium collection of '' 108,712.72 million, which contributed to 51.73% of Gross Written Premium. SBI Life has continued to focus on renewals and has undertaken initiatives to improve persistency of its existing policies. The independent Renewal Vertical is focusing on collection of renewal premiums and servicing policyholders. We shall continue to accord prime importance to this area.
26. RURAL & SOCIAL SECTOR OBLIGATIONS
As per the regulatory requirements, SBI Life has met its Rural and Social Sector obligations for financial year 2016-17. As against the minimum requirement of 20%, the Company has issued 24% policies in the rural sector which affirms the Company''s approach towards life insurance inclusion. Further, 589,932 lives covered (6.4% of total new lives covered in preceding year) by the Company are from the underprivileged social sector as against the regulatory requirement at least 5% of total lives covered in preceding year. Consequently, the Company has substantially exceeded the minimum social and rural regulatory norms.
27. MANAGEMENT REPORT
Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations 2000, the Management Report is placed separately and forms part of this Annual Report.
28. AUDITORS
In views of the applicability of Section 139 of the Companies Act 2013 to the Company, it comes under the purview of the Comptroller & Auditor General of India (C&AG). M/s L.S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, appointed by C&AG will retire at the conclusion of seventeenth AGM. M/s L.S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, are reappointed as Statutory Auditors of the Company for the financial year 2017-18 as advised by the Comptroller & Auditor General of India (C&AG) in accordance with Section 139 of the Companies Act 2013.
29. AUDITOR''S REPORT
The Auditor''s Report (including annexure thereof) to the Members does not contain any qualification, reservation, adverse remark, or disclaimer hence do not call for any further comments u/s 134 (3) (f) of the Companies Act 2013.
30. COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA (C&AG) ON THE ACCOUNTS OF THE COMPANY
The Comptroller & Auditor General of India have conducted a supplementary audit u/s 143 (6) (b) of the Companies Act, 2013 of the accounts of the Company for the year ended March 31, 2017. The C&AG vide their report no. GA/R1/ SBI Life/Audit/2016-17/24 dated June 22, 2017 have stated that there is nothing significant which would give rise to any comment upon or supplement to Statutory Auditors'' Report.
The Report of C&AG is being placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.
31. SECRETARIAL AUDIT REPORT
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed V. V. Chakradeo & Co., Company Secretaries, Mumbai as the Secretarial Auditor of the Company. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his report for FY 2016-17. The detailed report on Secretarial Audit of the Company for FY 2016-17 is enclosed as Annexure III to the report.
32. EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return (in form MGT-9) as at March 31, 2017 forms part of this report as Annexure IV.
33. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.
34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPNAY
During the financial year 2016-17, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operation in future.
35. DIRECTOR''S RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013 and the Corporate Governance Guidelines, your Directors confirm that;
a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2017 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the accounts for the current financial year ended March 31, 2017 on a going concern basis; and
e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
36. PARTICULARS OF CONVERSATION OF ENERGY , TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy
In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134 (3) and Rule 8 (3) of Companies (Accounts) Rules, 2014, is not required to be given.
B. Technology Absorption
|
Sr. No. |
Particulars |
Remarks |
|
Research & Development (R&D) |
||
|
1. |
Specific areas in which R & D |
⢠eSignature and eKYC were successfully implemented |
|
carried out by the Company |
for the New Business proposals which are sourced digitally. |
|
|
2. |
Benefits derived as a result of |
⢠The wet signature and ''styler'' signature through |
|
the above R&D |
tablet are avoided. ⢠Customers need not provide separate KYC documents. ⢠eSign confirms customer explicit consent and presence for documents submitted. |
|
|
3. |
Future plan of action |
⢠Implementation of Robotics in few of the operational processes is being targeted, to start with. |
|
4. |
Expenditure on R & D: (a) Capital (b) Recurring (c) Total (d) Total R & D expenditure as a percentage of total turnover |
In-house development. |
|
Technology absorption, adaption and innovation |
||
|
1. |
Efforts, in brief, made towards |
As a part of Digital Initiatives, the following areas were |
|
technology absorption, |
focused this year: |
|
|
adaptation and innovation |
⢠Mobile based solution for field force, an application called as ''Saathi''. ⢠For eSign process internally a Web Service was built for use by multiple delivery channels like Online Sales and tab based assisted Sales. |
|
|
2. |
Benefits derived as a result of |
⢠Easy on boarding process of CIFs (Certified Insurance |
|
the above efforts, e.g., product |
Facilitators) |
|
|
improvement, cost reduction, |
⢠Ease of uploading the requirement documents |
|
|
product development, import |
⢠Customer convenience and consent using eSign |
|
|
substitution, etc. |
⢠Better monitoring of performance reports ⢠Field force activity tracking |
|
|
3. |
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: (a) Technology imported (b) Year of import (c) Has technology been fully absorbed? (d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. |
Nil |
C. Foreign Exchange Earnings and Outgo
Details of foreign exchange earnings and outgo required under above Rules are as under:
(in '' million)
|
Particulars |
Current |
Previous |
|
Year |
Year |
|
|
Foreign Exchange |
- |
- |
|
Earnings |
||
|
Foreign Exchange Outgo |
181.55 |
855.65 |
37. IRDAI LICENSE
The Insurance Regulatory and Development Authority of India (IRDAI) have renewed the annual license of the Company to continue the Life Insurance Business for the financial year 2017-18.
38. OTHER INFORMATION
A. Economic Capital:
The annual assessment of economic capital of SBI Life was carried out as on December 31, 2016. As part of this exercise, we have quantified the risk capital requirements relating to various risks such as Insurance Risks (Mortality risk, Lapse Risk, Expense Risk etc.) and Non-Insurance Risks (Market Risk, Operational Risk etc.). The cost of guarantee for the products wherever applicable, is also calculated. A large part of the SBI Life portfolio is now monitored using a stochastic ALM model. The aggregate economic capital requirement for the risks of the Company including the guarantees is well within the statutory capital requirement. The current Solvency 2 ratio (Value / SCR) is 304%. The risk margin induced by this high ratio is well within comfortable levels.
B. Solvency Margin:
The Directors are pleased to report that the assets of the Company are higher than the liabilities of the Company and the assets are more than sufficient to meet the minimum solvency margin level of 1.50 times, as specified in section 64 VA of the Insurance Act, 1938 read with the IRDAI (Assets, Liabilities, and Solvency Margin of Life Insurance Business) Regulations, 2016. The Company has a strong solvency ratio of 2.04 as on March 31, 2017 (Previous year ended March 31, 2016: 2.12) as against the Regulatory requirement of 1.50.
C. IRDAI Directions
IRDAI has issued directions under Section 34 (1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 843.17 million vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012. The Company had filed an appeal against the said order with the Ministry of Finance, Government of India, who remanded the case back to IRDAI on November 4, 2015. IRDAI issued further directions dated January 11, 2017 reiterating the directions issued on October 5, 2012. The Company has filed an appeal against the said directions/ orders with the Securities Appellate Tribunal. The said amount is disclosed as contingent liability as at March 31, 2017 in Schedule 16C (1) of the notes to accounts.
IRDAI has issued directions under section 34 (1) of the Insurance Act, 1938 to refund the excess commission paid to corporate agents to the members or the beneficiaries amounting to '' 2,752.95 million vide order no. IRDA/Life/ORD/ Misc/083/03/2014 dated March 11, 2014. The Company has filed an appeal against the order with the Securities Appellate Tribunal. The said amount is disclosed as contingent liability as at March 31, 2017 in Schedule 16C (1) of the notes to accounts.
D. Appointed Actuary''s Certificate
The certificate of the Appointed Actuary on valuation and actuarial assumptions is enclosed in the financial statements.
E. Certificate from Compliance Officer (under the IRDAI Corporate Governance Guidelines)
A Compliance Certificate, for complying with IRDAI Corporate Governance Guidelines, issued by the Company Secretary, designated as the Compliance officer under the IRDAI Corporate Governance Guidelines, is enclosed and forms part of the Corporate Governance Report.
39. ACKNOWLEDGEMENTS
The Directors are grateful to the Insurance Regulatory and Development Authority of India, Reserve Bank of India, Comptroller and Auditor General of India, Securities and Exchange Board of India and Government of India for their continued co-operation, support and advice. The Directors would also like to take this opportunity to express their sincere thanks to the valued customers for their trust and patronage.
The Directors also express their gratitude for the advice, guidance and support received from time to time, from the auditors, and statutory authorities. The Directors expresses their deep sense of appreciation to all the employees, insurance advisors, corporate agents and brokers, distributors, re-insurers, bankers and the Registrars who continue to display outstanding professionalism and commitment, enabling the organization to retain market leadership in its business operations. The Directors also wish to express their gratitude to the State Bank of India, BNP Paribas Cardif S.A., Temasek and KKR for their continued support and trust.
For and on behalf of the Board of Directors
Place: Mumbai Arundhati Bhattacharya
Date: September 07, 2017 Chairman
Mar 31, 2016
TO,
THE MEMBERS OF
SBI LIFE INSURANCE COMPANY LIMITED
Your Directors are pleased to present their 16th Annual Report together with the audited financial statements of SBI Life Insurance Company Limited (''SBI Life'' or ''the Company'') for the year ended March 31, 2016.
1. Financial Results Highlights
The Company has completed another successful year of operations. The Company has earned a Gross Written Premium (GWP) of Rs, 15,825 crores on the back of consistent growth in Individual business during the financial year (FY) 2015-16. The Company continued meeting its stakeholders'' expectations achieving profitable growth year on year.
The summary of Company''s financial performance for FY 2015 - 16 is as under:
(Rs, crores)
|
Particulars |
FY 2016 |
FY 2015 |
|
Financial parameters |
||
|
Premium income |
||
|
- New business premium |
7,107 |
5,529 |
|
- Renewal premium |
8,719 |
7,338 |
|
Profit/(Loss) before taxation |
1,027 |
944 |
|
Provision for taxation |
166 |
124 |
|
Profit/(Loss) after taxation |
861 |
820 |
|
Profit at the beginning of the year |
2,974 |
2,306 |
|
Total profit available for appropriation |
3,835 |
3,126 |
|
Appropriations: |
||
|
Interim dividend (including dividend distribution tax) |
144 |
144 |
|
Corporate Social Responsibility expenses1 |
- |
8 |
|
Profit carried to the Balance Sheet |
3,691 |
2,974 |
|
Earnings per equity share: |
||
|
Basic & Diluted (Rs,) |
8.61 |
8.20 |
|
Book value per Share (Rs,) |
47.33 |
40.39 |
|
Sum assured (New Business) |
||
|
- Basic policy |
259,549 |
110,296 |
|
- Total (basic rider) |
280,043 |
135,314 |
|
Annualized premium equivalent (APE) |
4,878 |
3,551 |
|
Assets under Management (AUM) |
79,828 |
71,339 |
|
Net worth |
4,733 |
4,039 |
|
Key Performance Indicator: |
||
|
Expense ratio (excl. service tax on charges) |
9.21% |
9.14% |
|
Commission ratio |
4.51% |
4.69% |
|
Solvency ratio |
2.12 |
2.16 |
|
Persistency ratio (for 13th month on premium basis) |
77.67% |
76.29% |
|
Number of new policies (in ''000s) |
1,274 |
1,126 |
|
Sales, Distribution & Geographical strength: |
||
|
- Number of employees |
10,863 |
9,657 |
|
- Number of agents and CIFs |
126,536 |
110,392 |
|
- Number of offices |
774 |
750 |
* Pursuant to ICAI Guidance Note on "Accounting for Expenditure on Corporate Social Responsibility Activities", expenditure on CSR has been charged to Profit and Loss Account.
2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY''S AFFAIRS
The Company has registered a strong and consistent performance during FY 2015-16. The key financial parameters of the Company are as follows:
- Maintained its No. 1 position amongst private life insurers on total New Business Premium (NBP) basis, achieving highest NBP of Rs, 7,107 crores with a market share of 17.3% amongst private players;
- Registered an increase in new business total market share to 5.1% for FY 2016 from 4.9% in FY 2015;
- Registered a strong growth of 39% in NBP (Regular business) standing at Rs, 4,631 crores in FY 2016 as against Rs, 3,331 crores of FY 2015;
- Demonstrated a robust growth of 37% in its Individual new business APE portfolio;
- Collected a Renewal Premium of Rs, 8,719 crores during the FY 2016 from various distribution channels with growth of 19% as compared to previous year;
- Total gross written premium collected registered a growth of 23% to Rs, 15,825 crores in FY 2016 from Rs, 12,867 crores in FY 2015.
- Continued to show a steady growth both in business and earnings. The Net Profit of the Company grew by 5% and stands at Rs, 861 crores during the year ended March 31, 2016 as against Rs, 820 crores of the preceding year;
- Continued to maintain one of the lowest Operating Expense (excluding service tax on charges) to Gross Written Premium ratio (the OPEX Ratio) at 9.21%, amongst private sector life insurance companies;
- Based on the Company''s overwhelming performance during the FY 2016, your Company has registered a growth of 12% in its Assets under Management (AUM) to Rs, 79,828 crores as on March 31, 2016 as against Rs, 71,339 crores as on March 31, 2015.
- The Solvency ratio of the Company stands at 2.12 as on March 31, 2016 as against the Regulatory requirement of 1.50, indicating the strong & stable financial health of the Company;
- The 13th month persistency ratio (on premium basis) has also improved to 77.67% in FY 2016 from 76.29% in FY 2015.
- Embedded Value as on 31st March 2016
The company also declared its Market Consistent Embedded Value and New Business Margins for the first time as on 31st March 2016
1. Market Consistent Embedded Value of the company stands at Rs, 12,999 crores, as on 31st March 2016
2. The New Business Margin, based on medium term acquisition expense assumption, stood at 16%
3. The New Business Margin, based on current level of acquisition expense, stands at 14.2%
- Our Reach
The Company continued to focus on its planned expansion through quality recruitment and opening up of new branch offices. As at March 31, 2016, the Company has 774 offices, 92,619 Insurance Advisors (IAs) and 33,917 Certified Insurance Facilitators (CIFs) across the country as against corresponding figures of 750 offices, 83,656 IAs and 26,736 CIFs respectively as on March 31, 2015.
The total new business premium of Rs, 7,107 crores comprises of:
1. Rs, 1,952 crores from ''Retail Agency'',
2. Rs, 3,868 crores from ''Bancassurance'' channel,
3. Rs, 1,249 crores from ''Direct Business'',
4. Rs, 26 crores from ''Corporate Agent'' channel and
5. Rs, 12 crores from ''Brokers''
Further, the Company has taken yet another step towards creating a model brand that will be a leader not just in the country but also internationally. The Company has received an "in - principle" approval from the Regulator to open first international branch office in the Kingdom of Bahrain.
3. INDUSTRY AND COMPANY OUTLOOK
After almost half a decade, the life insurance industry has shown creditable growth both in new business premium collection and new policies sold in FY 2015-16. The private life insurers delivered healthy premium growth during the year under review and gained market share in the Individual segment. The life insurance industry registered 22.6% growth for new business premium in financial year 201516.
According to India Brand Equity Foundation (IBEF), India''s life insurance sector is one of the biggest in the world with about 360 million policies which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 per cent over the next five years. The insurance industry plans to hike penetration levels to five per cent by 2020.
The Union Budget 2016-17 has proposed several reforms for the insurance and pensions sector including a proposal to allow foreign investment in insurance sector through automatic route up to 49%. This decision was taken to facilitate consolidation within the market and support the infusion of capital which was much needed. With a view to raise capital from the public markets, the IRDAI has notified various regulations in 2015. Additionally, the regulator has initiated several changes for the life insurance sector such as expenses of management, corporate governance, convergence to the Indian Accounting Standards, etc.
The future looks promising for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers. Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance sector.
In current year, the Company has continued to show robust growth and has maintained a comfortable lead over its closest competitors in terms of New Business Premium collection.
While customer centricity remains the main focus, various initiatives continue to gather steam across the board, ranging from customer education initiatives, customer-connect campaigns, revival campaigns to ISO certifications, product innovations etc.
During FY 2016-17, one of the primary goals of the Company is to further strengthen the highly successful Bancassurance model, such that the channel attains a dominant position in the new business portfolio. This will be achieved by leveraging State Bank of India''s and its Associate Banks'' widespread branch network and equipping select branches with requisite resources including manpower support which would result in higher cross sell penetration.
4. DIVIDEND AND RESERVES
The Board, at its meeting held on March 28, 2016, has declared an interim dividend of Rs, 1.20 per equity share (previous year Rs, 1.2 per equity share), entailing a payout of Rs, 144 crores including dividend distribution tax (previous year Rs, 144 crores). No final dividend has been recommended for the year ended March 31, 2016 and interim dividend declared is to be confirmed as final dividend.
The Company has carried forward Rs, 3,691 crores to its Reserves.
5. CAPITAL
The shareholding pattern during the year under review was in accordance with statutory requirement. There was no capital infusion by the promoters during the financial year 2015-16. The Authorized and Paid-up Share Capital of the Company stands at Rs, 2,000 crores and Rs, 1,000 crores respectively. The existing Shareholders have continued to remain committed to support the business operations of the Company.
With the increase in Foreign Direct Investment (FDI) limit the insurance sector will be able to tap into foreign funds, making the sector more competitive and open for growth. The parent companies of SBI Life have expressed their interest in a stake sale and purchase in line with the revised FDI limits. Both the shareholders will take an appropriate decision based on the suitability of the economic scenario.
6. DEPOSITS
During the year under review, the Company has not accepted any deposits from the public as per Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.
7. AWARDS & RECOGNITIONS
- Won the ''The Indian Insurance Awards 2015'' for under-served Market Penetration, Life Insurance (Large Companies Category).
- Adjudged the Best Life Insurance Company (Private Sector) at the Lokmat BFSI Awards 2015 by World HRD Congress.
- Won ''Marketing Campaign of the Year'' award for Excellence in Branding and Marketing at 6th CMO Asia Awards.
- Won TISS Leapvault CLO Award 2015 for Best Program for Sales Enablement.
- Won Knowledge Management Leadership Award 2015 for "Use of Best Training Methods for Knowledge Management at the 14thAsia Pacific HRM Congress.
- Adjudged as one of the ''Most Trusted Brand, 2015'' for the fifth consecutive year by The Economic Times Brand Equity - Nielsen survey.
- Won IndIAA Awards 2015 for ''Best Advertisement'' under the ''insurance category''.
- Won ''Brand Excellence Award in Life Insurance (Private Sector)'' at the CMO Asia Awards 2015.
- Won the ''Golden Peacock Award for Risk Management'' for the year 2015.
- Won award in ''Best HR Technology'' category at ''Inspiring Work Places Conference 2015''.
- Achieved ''Gold'' level of recognition in the Aarogya Healthy Workplace Award 2015.
- Adjudged the "The Economic Times Best Corporate Brands 2016".
- Won Prime Time Award 2015 (Bronze) for the Great Dad advertising campaign under the ''Best Creative Advertising - Single Ad or Campaign'' category in the BFSI sector.
- Won ''Stars Of The Industry Award for Excellence In Life Insurance''.
- Awarded ''Golden Peacock National Quality Award'' for the year 2015 at IOD India''s ''26th World Congress on Leadership For Business Excellence & Innovation''.
- Won ''HR Technology Excellence'' Award at World HRD Congress 2016.
- ''Bandhan'' adjudged ''Best In - House Magazine'' at the Global Marketing Excellence Awards.
- SAFA Best Presented Annual Report Awards 2014 - The Annual Report has been adjudged as the recipient of ''Certificate of Merit'' for the year 2014 in the category ''lnsurance Sector''
Each of the awards demonstrates Company''s commitment to achieve excellence, across all spheres of its activities and operations. We owe these awards to the constant support and trust reposed by our Policyholders and Stakeholders and the hard work and dedication of our work force.
8. PRODUCTS
SBI Life has a wide range of products catering to various customer needs in the life, health, pension, on-line & microinsurance segments. The products are customer centric, simple to understand and have competitive features.
To maintain its competitive edge in the market, the Company had launched six new individual products and one new group product in the financial year 2015-16.
Details of the products launched are as follows:
1) SBI Life - eWealth Insurance (UIN: 111L100V01):
This is an individual, linked, non- participating product for the online channel.
2) SBI Life - CSC- Saral Sanchay (UIN: 111N099V01):
This is an individual, non-linked, non-participating variable insurance product marketed through the Common Service Centers set up by the Department of Electronics and Information Technology under the National e-Governance Plan.
3) SBI Life - Smart Money Planner (UIN: 111N101V01):
This is an individual, non-linked, with-profits endowment (money back type) assurance product.
4) SBI Life - Smart Humsafar (UIN: 111N103V01):
This is an individual, non-linked, with-profits joint life endowment product.
5) SBI Life - Smart Swadhan Plus (UIN: 111N104V01):
This is an individual, non-linked, non-participating term assurance with return of premium product.
6) SBI Life - Smart Women Advantage (UIN: 111N106V01): This is an individual, non-linked, with-profits insurance cum savings product exclusively for women.
7) SBI Life - Pradhan Mantri Jeevan Jyoti Bima Yojana (UIN: 111G102V01): This is a group, non-linked, non-participating one year renewable term insurance product to meet the requirement of Government of India PMJJBY Scheme.
9. CUSTOMER AND PARTNER SERVICE ENABLEMENT
Financial Year 2015-16 was a year of renewed focus on customer service delivery, process automation & enhancements in business process and quality. We consistently improved our performance in terms of customer service quality and delivery. Our dedicated efforts shall increase customer loyalty and help us in sustained development in the coming years. Listed below are the major initiatives taken by the Company during the FY 201516:
- Missed call service: Launch of "Missed Call" service for knowing fund value of ULIP policies. 245,161 missed calls received for querying fund value within 3 months of launch. The service has been successfully used for the policy revival campaign. 26,994 missed calls were received showing interest in revival of policy.
- Surrender prevention: Continuing the "Surrender Prevention" initiative, SMART - Surrender Management and Retention Tool was launched for branches to help prevent surrenders. This tool has won the first edition of the INNOVITI award for 2015-16.
- Revamped customer self service (CSS) portal: The CSS portal has been revamped with a new look & design. New functionalities like online submission of request for change of address and updating of bank account details have been included for our customers.
- Special revival campaign - 2015-16: Total Rs,127 crores was collected during the contest which is four times the amount collected during last 2 campaigns.
- Premium payment facilities
- The customer can now specify a preferred date for debit of premium from his account. This gives customers added convenience and also reduces the instances of failed debits.
- Single mandate for all Alternate Modes is introduced which will bring convenience to customers and sales teams.
- SBI e-Pay is a new payment gateway launched by State Bank of India (SBI) similar to Billdesk run by Indiaideas.com. It has now gone live.
- Online Standing Instructions (paperless registration) at New Business & Renewal stage introduced for credit card users. While making online payment through credit card for both New Business & Renewal, customer can set up Standing instructions for debit of future premiums. Total 1,894 customers have registered online for this facility.
- Customers while paying Renewal payments online through credit card can opt for EMI facility.
- Renewal payment through wallets/cash cards has also been introduced. Renewal payment through SBI Buddy, Airtel Money, Pay Cash Card, I Cash Card, ITZ Cash Cards enabled.
- Real-time cashiering for EFT and Bullet payment modes like Payment Gateway, AP Online, MP Online, and CSC has been enabled instead of the normal upload process which requires an additional day for execution.
- Customer engagement: The "Customer Engagement" Department came into existence on 1st June 2015 with the sole purpose of driving service related customer centric activities and enhancing overall service experience. A HNI Cell has been created to ensure faster processing of proposals and priority processing of servicing requests. Customer Awareness campaigns through email and SMS are being carried out to spread awareness on Life Insurance policies. Engaging Customers on their Birthday and Policy Anniversary by wishing them and taking feedback on our services has taken us a step further. Driving projects like creating leads, increasing email contactability and taking service ratings through IVRS on inbound calls has added value in terms of revenue generation and knowing the customer better.
- Go Green: Under ''Go Green'' project which was launched last financial year, the Company has started sending most of the communications via email. The major communications are renewal premium notices, renewal premium receipts, Unit statements for ULIP policies, lapse intimations, discontinuance notices, annual account statements for pension & variable insurance products, bonus statements, premium paid certificates.
- Underwriting
- Automated underwriting: The process of automated underwriting has been introduced for all products upto maximum Sum Assured of Rs, 5 lakhs, except high risk plans. This has considerably reduced the turnaround time (TAT) of acceptance of proposals.
- Paperless underwriting: Using dual screen technology, the underwriting process has been made paperless at all underwriting units. This has resulted in significant saving of time and usage of paper for printing rating sheets etc. This will also enable optimized storage of information for future reference.
website enabled in respect of CapAssure Defined Benefit and Defined Contribution schemes, wherein the master policyholder can view the fund value, interest accumulations and claims under its policies.
- Group Corporate portal also enabled for Master Policy Holders of Swarna Jeevan policy, which enables the Master Policy Holders to view annuitant details as well as to generate duplicate annuity certificate pertaining to the annuitants.
- Ladli Online Enrolment Module launched as per request of Delhi Government. This will also enable sending of SMS to members for renewal intimations under LADLI scheme.
- New Business
- Pre-Issuance Welcome Calling: Inbound calling facility was introduced to improve clearance of Pre Issuance Welcome Calling. Toll free number is sent on SMS to the customer after three calling attempts to reach the customer have failed. The customer can call the toll free number from the registered mobile number and clear the Pre Issuance Welcome Call.
- NB Payout Module: New payout module in New Business department was rolled out for the Regions. This module has built in workflow and gives regions the leverage to hold or allow payout after a specified period.
- Scan Flow: Scanners have been installed in all our Branches. The proposals received at the branches are scrutinized and the scanned images are transferred to the vendor for data entry almost immediately helping in improving issuance TAT. Thus, the time taken to transfer proposals from branches to the scanning centres is saved.
10. CUSTOMER GRIEVANCE REDRESSAL
The Company has put in place a Grievance Redressal Policy which is reviewed annually and status update of compliance is placed before the Board/ Management. This policy document lays down various provisions, systems and procedures to ensure prompt redressal of customer grievances through a well defined structure.
In accordance with IRDAI''s Corporate Governance Guidelines, the Company has formed a committee called the Policyholders'' Protection Committee with a view to address various compliance issues relating to protection of the interests of policyholders, and also to keep the policyholders well informed and educated about insurance products and complaint-handling procedures. The Committee is responsible for putting in place proper procedures and effective mechanism to address complaints and grievances of policyholders. Our Customer Grievance Redressal process has been successfully re-certified for ISO 10002:2004 standards. SBI Life is the second company in the Banking, Financial services and Insurance (BFSI) sector to have its Customer Grievance Redressal process certified under ISO10002:2004 standard.
The Company''s Grievance Redressal Management System is fully integrated with ''Integrated Grievance Redressal Management System'' (IGMS) of IRDAI. IGMS provides online view of customer complaints and the related turnaround time. The IGMS also facilitates escalation of complaints, where necessary.
The policyholder can approach the Company through any medium like letter, email, phone calls, SMS, toll free numbers or can directly approach any of the SBI Life branches for redressal of grievance. Grievance officers have been nominated for all the Branch Offices, Regional Offices and the Company. If the customer is not satisfied with the resolution provided by the branch, policyholder can contact the customer care desk at SBI Life Regional Office. The policyholder can also seek redressal with Head -Client Relationship at SBI Life Central Processing Center. The contact details are provided in the policy document and on the SBI Life website. The details of grievance disposal are as under:
|
Particulars |
FY 2015-16 |
FY 2014-15 |
|
Opening balance at the beginning of the year |
13 |
7 |
|
Add: Additions during the |
9,510 |
12,279 |
|
year |
||
|
Less: Complaints resolved during the year |
(9,516) |
(12,273) |
|
Complaints pending at the end of the year |
7 |
13 |
11. INFORMATION TECHNOLOGY
Keeping in view the faster changing technologies across the globe and customer centric conveniences - ease of usage, SBI Life is concentrating on bringing in technological innovations. Some of the major enhancements / initiatives are as follows:
a) Infrastructure
As a part of IT modernization, replacement of Core PMS Project (Policy Management System) was initiated last year. Accordingly, the Core PMS System - Ingenium from HP has been selected and the work is already in progress and Phase 1 is targeted to Go Live by the Financial Year 2016-17.
b) Process Area
This year more focus was given to Customer Friendly Digital Initiatives. The following are the major areas covered this year:
- Sourcing the Business through Tablet. Special thrust area was the proposals sourced through State Bank of India and Associate Banks
- Collecting the Payments through various Payment Gateways, including the State Bank of India, Associate Banks and Regional Rural Banks.
12. CLAIMS
Claims Management is a very important aspect of Insurance Business. At SBI Life, Customer Relationship at claims stage is built by providing efficient services, striving to exceed the customer expectations and creating avenues for widening self service facilities, including setting up of programmes for effective resolution of customer grievances. The prominent achievements in the claims area during FY 2015-16 are as follows:
- Overall Claim settlement % has improved to 95.77% in FY 2015-16 as compared to 92.40% in FY 2014-15.
- Non-Early death claim settlement TAT for FY 2015-16 is 5.43 days.
13. INVESTMENTS
Economic activity for Financial Year 2016 continued to gather pace over the previous year. The annual GDP data (new series) showed that India not only continued to dominate among the fastest growing nations, but also bettered its own performance of last year. India grew at 7.6% versus 7.2% in FY 2015. Commodity prices melt down and especially crude which was down 28% for the year continued to support a lower import bill for India. The Current Account Deficit narrowed from an already narrow gap of 1.3% of GDP to 1.11% of GDP by the end of 2015. The currency however weakened in FY 2016 by as much as 6% owing to a lot of strength show by US dollar considering US seeing its first rate hike since the GFC of 2008. Sensex ended the year at 25341, down 9.35%.
In the domestic bond markets, Yield on 10 year Government of India Bond eased by around 26 bps from 7.72% to 7.46% despite the Reserve Bank of India reducing the policy interest rates by 75 basis points on account of lower trajectory of inflation and confidence that the government will stick to its targeted path of fiscal consolidation. The average yield on 10 year G-sec was 7.74%. It reached a high of 7.99% in May 2015 and a low of 7.46% in March 2016. The varied news and events during the year and the hot and cold monetary policy tone of the RBI have all played a part in this volatility.
Government has made considerable progress by passing of The Aadhaar Act, The Mines and Minerals Amendment Act, The Insolvency and Bankruptcy Code Bill in the Parliament and The Constitution amendment Bill or the GST Bill. These will help reinstate confidence of investors in terms of its commitment towards reforms.
The hawkish tone of RBI in between the intermittent rate cuts during the regime of Dr. Rajan was instrumental in achieving the disinflationary trend which saw CPI fall from 8.2% in March 2014 to 4.83% in March 2016. It touched a low of 3.69% in July 2015. Also RBI maintained its strategy to amass foreign exchange reserves by allowing the INR to depreciate has resulted in providing enough buffers against any external volatility and risks. The Forex reserve has moved higher from $ 340 bn in April 2015 to $ 361 bn by the end of March 2016.
The Assets under Management (AuM) increased by 12% to Rs, 79,828 crores as on March 31, 2016 from Rs, 71,339 crores as on March 31, 2015. The AuM was made up of Rs, 43,806 crores of traditional funds (including share holders funds) and Rs, 36,022 crores of Unit Linked Funds. The Unit linked portfolio majorly comprises of equity funds and NAV guaranteed funds. The performance of both traditional and unit linked funds was satisfactory in comparison to peers.
14. PARTICULARS OF EMPLOYEES
SBI Life has completed 15 years of being in business. The FY 2015-16 for SBI Life, has been a period of business out performance, large scale transformation and strong efforts on managing business. This performance has been the result of the relentless focus and effort that the management team along with the company''s entire workforce has put in pursuing its strategy.
SBI Life family has grown from 9,657 employees as on March 31, 2015 to 10,863 employees as on March 31, 2016 which depicts a growth of 12.48%. While the average age of employees is 34.1 years, the average tenure comes to 3 years 6 months. There was a huge focus on alignment of goals across the organization, communication and leadership development initiatives that have led to strong improvement in business. Various talent acquisition and development interventions like Town-Halls and Learning & Development initiatives have been at the centre of HR initiatives during the financial year 2015-16. To take the Company''s talent management initiatives to the next level, various projects to increase effectiveness of HR subsystems like talent acquisition, Learning and Development, succession planning, employee communication, etc. are being undertaken.
Placing higher emphasis on employee engagement activities, the Company continued with the ''Town Hall'' initiative through which the Top Management of the Company interacts with the employees at the grass root levels and tries to understand the employees'' aspirations and expectations from the company. Other initiatives like Sangam (Annual Day celebrations), cross functional offsite and corporate dinners were also organized for the employees to encourage team bonding and camaraderie within the SBI Life family.
In accordance with the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.
15. RISK MANAGEMENT
The Company is in the business of covering life risks on payment of a premium. Risk Management therefore becomes an integral part of its business activities. The Company is committed to recognizing and managing its risks in a proactive, ongoing and positive manner.
Risk philosophy of the Company is outlined in the Risk Management Policy. The Risk policy specifies the process for identification, measurement and analysis of Company risk exposures; develop risk management strategies and its monitoring. The Risk Management Policy is supported by various other policies pertaining to insurance, market, compliance, outsourcing, fraud risks and business continuity management. All the above policies are reviewed by the Board on an annual basis.
The Company''s Business Continuity Management System (BCMS) is ISO 22301 certified and its Information Security Management System (ISMS) is ISO 27001 certified. The Company has formulated risk appetite statements at the corporate as well as the functional level, which are reviewed and monitored by the Board level Risk Management Committee and Internal Risk Management Committee respectively. The Company also carries out an ICAAP (Internal Capital Adequacy Assessment Process) activity, which details the assessment of material risks, estimation of capital requirement and adequacy for maintaining solvency requirements.
More information on the risk management practices adopted by the Company is available in the ''Enterprise Risk Management'' section appended to this report.
16. INTERNAL AUDIT FRAMEWORK
The Company has in place a robust internal audit framework developed with a risk based audit approach and is commensurate with the nature of the business and the size of its operations. The internal audit plan covers the process audits as well as transaction based audits at the Head Office, Regional Office and across various branches of the Company.
The audits are carried out by the internal audit team of the company and also by the independent Chartered Accountants firms. The approach of the audit is to verify compliance with the regulatory, operational and system related procedures and controls. Key audit observations and recommendations made by the internal auditors are reported to the Board Audit Committee of the Company. It is ensured that the recommendations made by the auditors are implemented by various departments.
17. INTERNAL FINANCIAL CONTROLS
The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013, on lines of globally accepted risk based framework as issued by the Committee of Sponsoring Organizations (COSO). The internal control framework is intended to increase transparency and accountability in an organizationâs process of designing and implementing a system of internal control. The framework requires a company to identify and analyse risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness.
The Company''s internal financial controls framework is based on the ''three lines of defense model''. The Company has laid down standard operating procedures and policies to guide the business operations. The Company has a well-defined delegation of power with authority limits for approving revenue and capital expenditure. The C&AG, Statutory, Concurrent and Internal Auditors undertake rigorous testing of the control environment of the Company.
The Company has a Chief Internal Auditor with a dedicated internal audit team which is commensurate with the size, nature & complexity of operations of the Company. The Company also undergoes an independent internal/ concurrent audit by specialized third party professional consultants to review function specific regulatory compliances as well as internal controls.
The audit committee reviews reports submitted by the Management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the Audit Committee follows up on corrective action. The Audit Committee also meets the Company''s statutory auditors to ascertain their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations, if any periodically.
Auditor''s Report
There is no qualification, reservation, adverse remark or disclaimer made by the auditors in their report on Internal Financial Controls.
18. RELATED PARTY TRANSACTIONS
The Company has a related party transactions policy to regulate the transactions with its related parties. As per policy, all related party transactions require approval of the Audit Committee of the Board. As per Rule 6A of the Companies (Meeting of Board and its Powers) Rules 2014 the Audit Committee may grant omnibus approval for related party transactions proposed to be entered into by the Company subject the terms and conditions mentioned in the said rule.
All the Related Party Transactions entered into during the financial year were on arm''s length basis and in ordinary course of business. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval.
M/s L.S. Nalwaya & Co., Chartered Accountants, reviewed the related party transactions for each quarter, and their report is placed at the meeting of the Board Audit Committee, along with details of such transactions.
All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 36 of Schedule 16 (C) - Notes to Accounts of the financial statements of the Company.
19. IND AS IMPLEMENTATION
The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015 and issued a press release on January 18, 2016 outlining the road map for implementation of Ind AS in the financial services sector, including insurance companies.
Subsequently, IRDAI issued a circular on "Implementation of Indian Accounting Standards (Ind AS)", on March 1, 2016, requiring insurance companies to prepare and execute the implementation of Ind AS. The circular requires all insurers to comply with the Ind AS based financial statements for FY 2018-19 with comparatives of FY 2017-18.
The detailed roadmap for implementation of Ind AS was placed in the Board Audit Committee meeting held on April 28, 2016 and Board Meeting held on 29th April 2016. Board Audit Committee shall oversee the progress of the Ind AS implementation process and report to the Board at quarterly intervals. The Board Audit Committee has been entrusted with the responsibility of overseeing the progress of the Ind AS implementation process and report to the Board quarterly.
As mandated by the IRDAI, the Company has set up Steering Committee for implementation of Ind AS comprising of Chief Financial Officer, Appointed Actuary, Chief Information Officer, Chief Investment Officer and BNP Paribas Cardif representative. The Company has also nominated the nodal officer to IRDAI, to facilitate smooth implementation of Ind AS.
As per the requirement of IRDAI circular, the Company has to submit proforma Ind AS financial statements to the IRDAI from the quarter ended December 31, 2016 onwards until implementation of Ind AS.
20. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors
The composition of the Board of Directors of the Company is an optimum combination of Independent and Non Independent Directors. The Board has strength of ten Directors as on March 31, 2016. The Board has four Independent Directors and six Non-Independent Directors which includes one Executive Director.
Changes during the year
During the year under review, Mr. K. M. Bhattacharya ceased to be an Independent Director w.e.f. September 22, 2015 due to expiry of his tenure. The Board placed on record its sincere appreciation for the valuable services and guidance provided by Mr. K. M. Bhattacharya during his tenure as an Independent Director.
Mr. B. Sriram resigned from the Board of SBI Life w.e.f. March 15, 2016. Mr. Rajnish Kumar was nominated by SBI as Nominee Director w.e.f. March 28, 2016. Smt. Joji Sekhon Gill was appointed as an Independent Director of SBI Life w.e.f. March 28, 2016.
In terms of Section 152 of the provisions of the Companies Act 2013, Mr. Gerard Binet would retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.
Meetings
Meetings were convened and held, the details of which are given in the Report on Corporate Governance, which is forming a part of this report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013.
Key Managerial Personnel
Mr. Arijit Basu (Managing Director & CEO), Mr. Sangramjit Sarangi (Chief Financial Officer) and Mr. Aniket Karandikar (Company Secretary) are designated "Key Managerial Personnel" of the Company, under the provisions of the Act. There were no changes in the Key Managerial Personnel during the FY 2015-16.
Audit Committee
The composition and the functions of the Audit Committee of the Board of Directors of the Company are disclosed in the Report on Corporate Governance, which is forming a part of this report.
Remuneration Policy
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board has approved the remuneration policy as recommended by the Board Compensation Committee. The details of the said policy are annexed as Annexure I to this Report.
21. CORPORATE GOVERNANCE
The Corporate Governance philosophy of the Company is to comply with not only the statutory requirements, but also to voluntarily formulate and adhere to a strong set of Corporate Governance practices which includes code of business conduct, corporate ethics, values, risk management, etc. The Report on Corporate Governance is annexed and forms part of this Annual Report.
22. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility) Rules, 2014 which drives the CSR programme of the Company.
The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.
The brief outline of the CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the year have been disclosed in Annexure II to this Report, as mandated under the said Rules.
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
In line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Companies Act, 2013 relating to loans, guarantees and investments do not apply to the Company.
24. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company does not have any Subsidiary, Joint Ventures or Associate Company.
25. PERSISTENCY
Persistency is a critical indicator of business viability and brand success. During the FY 2015-16, SBI Life witnessed a Renewal Premium collection of '' 8,719 crores, which contributed to 55.09% of Gross Written Premium. SBI Life has continued to focus on renewals and has undertaken initiatives to improve persistency of its existing policies. The independent Renewal Vertical is focusing on collection of renewal premiums and servicing policyholders. We shall continue to accord prime importance to this area.
26. RURAL & SOCIAL SECTOR OBLIGATIONS
As per the regulatory requirements, SBI Life has met its Rural and Social sector obligations for the year under review. As against the minimum requirement of 20%, the Company has issued 24% policies in the rural sector which testifies the Company''s approach towards life insurance inclusion. Further, 285,027 lives covered by the Company are from the underprivileged social sector as against the Regulatory requirement of 55,000 lives. Consequently, the Company has substantially exceeded the minimum social and rural regulatory norms.
27. MANAGEMENT REPORT
Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors'' Report of Insurance Companies) Regulations 2000, the Management Report is placed separately and forms part of this Annual Report.
28. AUDITORS
In view of the applicability of Section 139 of the Companies Act, 2013 to the Company, it comes under the purview of the Comptroller and Auditor General of India (C&AG). M/s L.
S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, appointed by C&AG will retire at the conclusion of the sixteenth AGM. M/s L.
S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, are re-appointed as Statutory Auditors of the Company for the financial year 2016-17 as advised by the Comptroller and Auditor General of India (C&AG) in accordance with Section 139 of the Companies Act, 2013.
29. AUDITORS'' REPORT
The Auditors'' Report (including annexure thereof) to the Members does not contain any qualification or adverse remarks. The notes to accounts referred to in the Auditors'' Report are self explanatory and therefore do not call for any further comments u/s 134 (3) (f) of the Companies Act, 2013.
30. COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA (C&AG) ON THE ACCOUNTS OF THE COMPANY
The Comptroller & Auditor General of India have conducted a supplementary audit u/s 143 (6) (b) of the Companies Act, 2013 of the accounts of the Company for the year ended March 31, 2016. The C&AG vide their report no. GA/CA-1/SBI Life/Audit/2015-16/83 dated August 12, 2016 have stated that there is nothing significant which would give rise to any comment upon or supplement to Statutory Auditors'' Report.
The Report of C&AG is being placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.
31. SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed V. V. Chakradeo & Co., Company Secretary, Mumbai as the Secretarial Auditor of the Company. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his Report for FY 2015-16. The detailed report on Secretarial Audit of the Company for the FY 2015-16 is enclosed as Annexure III to the report.
32. EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return (in form MGT 9) as at March 31, 2016 forms part of this report as Annexure IV.
33. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
34. SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY
During the financial year 2015-16, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
35. DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013 and the Corporate Governance Guidelines, your Directors confirm that;
a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the accounts for the current financial year ended March 31, 2016 on a going concern basis; and
e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
36. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy
In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134 (3) and Rule 8(3) of Companies (Accounts) Rules, 2014, is not required to be given.
B. Technology Absorption
|
Sr. No. |
Particulars |
Remarks |
|
Research & Development (R&D) |
||
|
1. |
Specific areas in which R & D carried out by the company |
- 1 RIS: A tool that scans the iris of the eye and maps it with the IRIS information stored in UIDAI database |
|
2. |
Benefits derived as a result of the above R&D |
- Quality information from UIDAI database - Customers need not provide separate KYC documents |
|
3. |
Future plan of action |
- To study if the existing process of OTP (One Time Password) can be replaced with this technology and implement it. |
|
4. |
Expenditure on R & D: (a) Capital (b) Recurring (c) Total (d) Total R & D expenditure as a percentage of total turnover |
In-house development. |
|
Technology absorption, adaption and innovation |
||
|
1. |
Efforts, in brief, made towards technology absorption, adaptation and innovation |
As a part of Digital Initiatives, we call it as ''Digilife'', the following areas were more focused this year: - Connect Life: Sourcing the Business through Tablets - MOBCAST: A Learning Platform through Mobile Application to all SBI Life Employees, Distributors and Bank Staff - Qlik View: An Analytical Tool which enables the users to create dynamic reports and dashboards - Easy Access: An Android based Mobile Application which will enable the customers to pay premium and get information instantly. - Smart Advisor: An Android based Mobile Application for the distributors to know the product features and calculate the premium. |
|
2. |
Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. |
- Ease of usage - Improved quality of customer data and document images - No need for physical submission of documents, like proposal form and various proofs - Information dissemination to employees and distributors. - Convenience for the customers and distributors |
|
3. |
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: (a) Technology imported. (b) Year of import. (c) Has technology been fully absorbed Rs, (d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. |
NIL |
C. Foreign Exchange Earnings and Outgo
Details of foreign exchange earnings and outgo required under above Rules are as under:
(Rs, crores)
|
Particulars |
Current Year |
Previous Year |
|
Foreign exchange earnings Foreign exchange outgo |
85.57 |
59.34 |
37. IRDAI LICENSE
The Insurance Regulatory and Development Authority of India (IRDAI) have renewed the annual license of the Company to carry on Life Insurance Business for the financial year 2016-17.
38. OTHER INFORMATION
A. Economic Capital
The annual assessment of economic capital of SBI Life was carried out as on March 31, 2016. As a part of this exercise, we have quantified the risk capital requirements relating to various risks such as Insurance Risks (Mortality risk, Lapse Risk, Expense Risk etc.) and Non Insurance Risks (Market Risk, Operational Risk etc.). The cost of guarantee for the products wherever applicable, is also calculated. The aggregate economic capital requirement for the risks of the Company including the guarantees is well within the statutory capital requirement.
B. Solvency Margin
The Directors are pleased to report that the assets of the Company are higher than the liabilities of the Company and the assets are more than sufficient to meet the minimum solvency margin level of 1.50 times, as specified in section 64 VA of the Insurance Act, 1938 read with the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2000. The Company has a strong solvency ratio of 2.12 as on March 31, 2016 (Previous year ended March 31, 2015: 2.16) as against the Regulatory requirement of 1.50.
C. IRDAI Directions
IRDAI has issued directions under Section 34(1) of the Insurance Act, 1938, to distribute the administrative charges paid to master policyholders vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012 amounting to '' 84.32 crores and to refund the excess commission paid to corporate agents vide order no.
IRDA/Life/ORD/ Misc/083/03/2014 dated March 11, 2014 amounting to '' 275.29 crores respectively to the members or the beneficiaries. The Company has filed appeals against the said directions/orders with the Appellate Authorities [i.e. Ministry of Finance, Government of India and Securities Appellate Tribunal (SAT)]. The said amount is disclosed as contingent liability as at March 31, 2016 in Schedule 16C (1) of the notes to accounts.
D. Appointed Actuary''s Certificate
The certificate of the Appointed Actuary on valuation and actuarial assumptions is enclosed to the financial statements.
E. Certificate from Compliance Officer (under the IRDAI Corporate Governance Guidelines)
A Compliance Certificate, for complying with IRDAI Corporate Governance Guidelines, issued by the Company Secretary, designated as the Compliance Officer under IRDAI Corporate Governance Guidelines, is enclosed and forms part of the Corporate Governance Report.
39. ACKNOWLEDGEMENTS
The Directors are grateful to the Insurance Regulatory & Development Authority of India, Reserve Bank of India, Comptroller and Auditor General of India, Securities and Exchange Board of India and Government of India for their continued co-operation, support and advice. The Directors would also like to take this opportunity to express their sincere thanks to the valued customers for their continued patronage.
The Directors also expresses their gratitude for the advice, guidance and support received from time to time, from the auditors and the statutory authorities. The Director expresses their deep sense of appreciation to all employees, insurance advisors, corporate agents and brokers, distributors, reinsurers, bankers and the Registrars who continue to display outstanding professionalism and commitment, enabling the organization to retain market leadership in its business operations. The Directors also wish to express their gratitude to State Bank of India and BNP Paribas Cardif for their continued support and trust.
For and on behalf of the Board of Directors
Place: Mumbai Arundhati Bhattacharya
Date: September 08, 2016 Chairman
Mar 31, 2015
DIRECTORS'' REPORT............................................................................................
TO,
THE MEMBERS OF
SBI LIFE INSURANCE COMPANY LIMITED
Your Directors are pleased to present their Fifteenth Annual Report together with the audited financial statements of SBI Life Insurance Company Limited (''SBI Life'' or ''the Company'') for the year ended March 31, 2015.
(I) Financial Results
The Company has completed another successful year of operations. The Company has earned a Gross Written Premium (GWP) of Rs, 12,867 crores on the back of consistent growth in Individual business during the financial year (FY) 2014-15. The Company continued meeting its stakeholders'' expectations achieving profitable growth year on year.
The summary of Company''s financial performance for FY 2014 - 15 is as under:
(? Rs,crores)
|
Particulars |
FY 2015 |
FY 2014 |
|
Financial parameters |
||
|
Premium income |
||
|
- New business premium |
5,529 |
5,066 |
|
- Renewal premium |
7,338 |
5,673 |
|
Profit/(Loss) before taxation |
944 |
830 |
|
Provision for taxation |
124 |
90 |
|
Profit/(Loss) after taxation |
820 |
740 |
|
Profit at the beginning of the year |
2,306 |
1,683 |
|
Total profit available for appropriation |
3,126 |
2,423 |
|
Appropriations: |
||
|
Interim dividend (including dividend distribution tax) |
144 |
117 |
|
Corporate Social Responsibility expenses |
8 |
- |
|
Profit carried to the Balance Sheet |
2,974 |
2,306 |
|
Earnings per equity share: |
||
|
Basic & Diluted (?) |
8.20 |
7.40 |
|
Book value per Share (?) |
40.39 |
33.42 |
|
Sum assured (New Business) |
||
|
- Basic policy |
110,296 |
86,086 |
|
- Total (basic rider) |
135,314 |
102,663 |
|
Annualised premium equivalent (APE) |
3,551 |
3,204 |
|
Assets held |
71,339 |
58,480 |
|
Net worth |
4,039 |
3,342 |
|
Key Performance Indicator: |
||
|
Expense ratio (excl. service tax on ULIP charges) |
9.15% |
10.28% |
|
Commission ratio |
4.69% |
5.18% |
|
Solvency ratio |
2.16 |
2.23 |
|
Persistency ratio (for 13th month on premium basis) |
74% |
72% |
|
Number of new policies (in Rs,000s) |
1,126 |
1,041 |
|
Sales, Distribution & Geographical strength: |
||
|
- Number of employees |
9,657 |
9,114 |
|
- Number of agents and CIFs |
110,392 |
136,579 |
|
- Number of offices |
750 |
762 |
(II) Results of operations and the State of Company''s Affairs
The Company has registered a strong and consistent performance during FY 2014-15. The key financial parameters of the Company are as follows:
- Maintained its No. 1 position amongst private life insurers on total New Business Premium (NBP) basis, achieving highest NBP of Rs, 5,529 crores with a market share of 15.9% amongst private players;
- Registered an increase in new business total market share to 4.9% for FY 2015 from 4.2% in FY 2014;
- Registered a strong growth of 11% in NBP (Regular business) standing at Rs, 3,331 crores in FY 2015 as against Rs, 2,998 crores of FY 2014;
- Demonstrated a robust growth of 11% in its Individual new business APE portfolio;
- Collected a Renewal Premium of Rs, 7,338 crores during the FY 2015 from various distribution channels with growth of 29% as compared to previous year;
- Total gross written premium collected registered a growth of 20% to Rs, 12,867 crores in FY 2015 from Rs, 10,739 crores in FY 2014.
- Continued to show a steady growth both in business and earnings. The Net Profit of the Company grew by 1 1% and stands at Rs, 820 crores during the year ended March 31, 2015 as against Rs, 740 crores of the preceding year;
- Continued to maintain one of the lowest Operating Expense (excluding service tax on ULIP charges) to Gross Written Premium ratio (the OPEX Ratio) at 9.15%, amongst private sector life insurance companies;
- Based on the Company''s overwhelming performance during the FY 2015, your Company has registered a strong growth of 22% in its Assets under Management (AUM) to Rs, 71,339 crores as on March 31, 2015 as against Rs, 58,480 crores as on March 31, 2014.
- The Solvency ratio of the Company stands at 2.16 as on March 31, 2015 as against the Regulatory requirement of 1.50, indicating the strong & stable financial health of the Company;
- The 13th month persistency ratio (on premium basis) has also improved to 74% in FY 2015 from 72% in FY 2014.
- Based on the robust financial performance of the Company year on year, there has been no external capital infusion during the last six financial years;
- In view of Company''s performance, profitability, cash flows and financial position, an interim dividend was declared during the FY 2014-15 at 12% of equity share capital amounting to Rs, 144 crores (including dividend distribution tax);
- Distribution
The Company continued to focus on its planned expansion through quality recruitment and opening up of new branch offices. As at March 31, 2015, the Company has 750 offices, 83,656 Insurance Advisors (IAs) and 26,736 Certified Insurance Facilitators (CIFs) across the country as against corresponding figures of 762 offices, 1,10,491 IAs and 26,088 CIFs respectively as on March 31, 2014.
The total new business premium of Rs, 5,529 crores comprises of:
- Rs, 1,817 crores from ''Retail Agency'',
- Rs, 2,644 crores from ''Bancassurance'' channel,
- Rs, 1,002 crores from ''Direct Business'' and
- Rs, 66 crores from ''Corporate Agent'' channel
Industry & Company Outlook
The financial year 2014-15 witnessed some landmark changes in the insurance sector. One of the most recent changes is the proposal to increase the foreign investment cap to 49% from 26% for the sector. This has been a long pending reform which the newly elected government had taken up on a priority basis. Increase in Foreign Direct Investment (FDI) limit will not only give the insurance sector the much needed access to foreign funds, but will also make the sector more competitive and open for growth. Access to international best practices and entry of mature players in the industry will help in the strategic development of the sector.
In 2015-16, the sector is expected to witness consolidation in addition to introduction of new distribution channels, innovations in products, a more stringent regulatory regime and expected to see changes in the operational as well as ownership levels. New players could enter the market, while existing smaller players can be taken over by the larger players.
The sector is expected to grow at a fast pace in the coming years, with increasing awareness and penetration levels. Forward looking policies and innovations by insurance players will help in taking the sector to the next level of growth.
According to India Brand Equity Foundation (IBEF), the insurance sector is expected to grow at a CAGR of 12%-15% over the next five years. With India having high savings rate in comparison to many other countries, this should not be a very difficult target to achieve. This shows the enormous potential of the sector. Proactive policies by the regulator and the government, increasing customer awareness, making operations efficient, innovative products and bringing about customer centric products and services will help in taking the sector to the next level of growth.
The Company and the industry as a whole witnessed a moderate and competitive growth in the financial year 2014-15. However, year on year, SBI Life has maintained a significant lead over its closest competitors in terms of New Business Premium collection.
In FY 2015-16, one of the primary goals of the company is to further strengthen our highly successful Bancassurance model such that the channel attains a visibly dominant position in the new business portfolio. This is to be achieved by leveraging State Bank of India''s and its Associate Banks'' widespread branch network and equipping select branches with commensurate resources including manpower support which would result in higher cross sell penetration.
Customer centricity remains the mainstay. Various initiatives continue to gather steam across the board, ranging from customer education initiatives, customer-connect campaigns, revival campaigns to ISO certifications, product innovations etc.
The future looks interesting for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers. Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance.
(III) Regulatory Changes
The Insurance Laws (Amendment) Act, 2015 was enacted on March 23, 2015. The amendment Act aims to bring improvements and revisions in the earlier laws relating to insurance business in India. It also provides for enhancement of the foreign investment cap in an Indian Insurance Company from 26% to an explicitly composite limit of 49% with the safeguard of Indian ownership and control.
The insurance Regulator, IRDAI, has issued several guidelines during the year to bring more transparency between insurer, policyholder & Regulator.
The guidelines / regulations, issued / amended by IRDAI during the year, includes appointment of insurance agents, foreign investments rules, registration of insurance marketing firms, pilot launch of the Insurance Repository System, Interest rate derivatives, etc,.
(IV) Internal Financial Controls
The Company continuously invests in strengthening its internal control processes. The Company has put in place an adequate system of internal financial control commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of its business.
These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention & detection of frauds, accuracy & completeness of accounting records and ensuring compliance with corporate policies.
Financial policies, standards and delegations of authority have been disseminated to senior management to cascade within their departments. Procedures to ensure conformance with the policies, standards and delegations of authority have been put in place covering all activities.
The Company has a Chief Internal Auditor with a dedicated internal audit team which is commensurate with the size, nature & complexity of operations of the Company. Internal audit reports functionally to Audit Committee of Board which reviews and approves risk based annual internal audit plan. Audit Committee periodically reviews the performance of internal audit function.
The Company has a rigorous business planning system to set targets and parameters for operations which are reviewed with actual performance to ensure timely initiation of corrective action, if required. The Audit Committee reviews adherence to internal control systems and internal audit reports. Further, the Board annually reviews the effectiveness of the Company''s internal control system.
(V) Dividend and Reserves
The Board, at its meeting held on March 27, 2015, had declared an interim dividend of Rs, 1.20 per equity share (previous year Rs, 1 per equity share), entailing a payout of Rs, 144 crore including dividend distribution tax (previous year Rs, 117 crore). No final dividend has been recommended for the year ended March 31, 2015 and interim dividend declared is to be confirmed as final dividend.
The Company has carried forward a total of Rs, 2,974 crore to its Reserves.
(VI) Capital
The shareholding pattern during the year under review was in accordance with statutory requirement. There was no capital infusion by the promoters during the financial year 2014-15. The Authorized and Paid-up Share Capital of the Company stands at Rs, 2,000 crores and Rs, 1,000 crores, respectively. The existing Shareholders have continued to remain committed to support the business operations of the Company.
With the increase in Foreign Direct Investment (FDI) limit the insurance sector might be able to tap into foreign funds, making the sector more competitive and open for growth. The parent companies of SBI Life in line with the revised limits in FDI have expressed interest in a stake sale and purchase.
The two will soon begin the process of valuing the company, and an appropriate decision may be taken based on the suitability of the economic scenario.
(VII) Deposits
During the year under review, the Company has not accepted any deposits under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014, as amended, from the public.
(VIII)Awards & Recognitions
Continuing its journey to achieve holistic excellence, SBI Life won several awards and recognitions during the financial year 2014-15.
- Adjudged ''The Economic Times Promising Brands 2015'', by The Economic Times, Nielsen survey;
- Ranked as ''Most Trusted Private Life Insurance Brand'' for the fourth consecutive year by The Economic Times, Brand Equity and Nielsen Survey 2014;
- Adjudged ''Best Life Insurance Provider 2014'' -Runner up by Outlook Money;
- Awarded ''Best Life Insurance Company Award'' by Asia Banking, Financial Services and Insurance (BFSI) Excellence 2014;
- Awarded ''Platinum Award for Excellence in Life Insurance'' by Skoch Financial Inclusion and Deepening Awards 2014;
- Awarded ''Non-Urban Coverage - Life Insurance'', by Indian Insurance Awards 2014;
- Awarded the ''Best Training Provider of the Year'' by the Golden Globe Tigers Award 2015 and awarded ''Best Practice in Learning Transfer for Improving Business Bottom Line'' Year'' by the Golden Globe Tigers Award 2015;
- Awarded ''Golden Peacock National Training Award, 2014'';
- Awarded ''Excellence in HR through Technology'', ''Best HR Strategy in line with business'', and ''Managing Health at work'' at World HRD Congress 2015;
- Awarded ''Inspiring Work Place Award 2014'' in BFSI by Banking Frontiers;
- Won Plaque Award for commended Annual Report from Institute of Chartered Accountants of India (ICAI) for ''Excellence in Financial Reporting, 2013 -2014'';
- Received ''FINNOVITI - Digital Innovation Award 2015'' for Connect Life;
- Received ISO 22301 Certification for Business Continuity Management System;
We owe these awards to the constant support and trust reposed by our Policyholders and Stakeholders and the hard work and dedication of our work force.
(IX) Products
SBI Life has a wide range of products catering to various customer needs in the life, health, pension, on-line & microinsurance segments. The products are customer centric, simple to understand and have competitive features.
To maintain its competitive edge in the market, the Company had launched three new individual products and one new group product in the financial year 2014-15.
Details of the products launched are as follows:
1. SBI Life - Smart Guaranteed Savings Plan (UIN: 111N097V01): This is an individual, non-linked, nonparticipating endowment assurance product.
2. SBI Life - Smart Champ (UIN: 111N098V01): This is an individual, non-linked, with-profits endowment product.
3. SBI Life - Smart Income Protect (UIN: 111N085V02):
This is an individual, non-linked, with-profits savings product.
4. SBI Life - Suraksha Plus (UIN: 111N051V02):
This is a non-linked, non-participating, group term assurance product with Single Premium and Regular Premium options.
(X) Customer and partner service enablement
Financial Year 2014-15 witnessed successful implementation of various initiatives aimed at enhanced service experience and customer engagement. These initiatives have helped us in gaining momentum in our journey towards achievement of Mission and Vision. Key initiatives implemented during FY 2014-15 are as follows;
Enhanced Customer Convenience
- Launch of Electronic Fund Transfer (EFT) at Regional Rural Banks: EFT facility for new business and renewal premium payment has been extended to the 13 Regional Rural Banks of State Bank Group. Till now this facility was available only with State Bank of India and its Associate Banks.
- Launch of NACH: SBI Life became a member of the National Automated Clearing House (NACH) to facilitate collection of renewal premium from customers of different banks. The coverage and efficiency of this new alternate mode is far greater than the existing ECS and Direct Debit modes with more than 293 participating banks.
- Easy Collect: The facility to pay renewal premium in cash at any State Bank of India branch was rolled out. Customers can now pay renewal premium in cash up to '' 49,999.
- Extension of Debit/Credit Card Swipe facility: During FY 14-15, the company enabled 81 branches to collect renewal premium payment through debit/credit cards. We have processed 16,436 transactions amounting to Rs, 22.01 Crore towards renewal premium.
- Policy Servicing forms in Regional Language:
In order to assist policyholders in submitting the policy servicing requests in the preferred language of communication, all policy servicing forms are now available in all the major regional languages.
- Dematerialization of Insurance Policies: SBI Life proactively participated in the pilot phase of the electronic policy issuance i.e. Dematerialized policies rolled out by IRDAI. This facility will help policyholders to have a common KYC across insurance companies. Approximately 25,000 demat requests were processed in FY 2014-15.
Go Green: During FY 2014-15, the company actively promoted registration of email ids for customer communications through "Go Green" campaign. This campaign not only helped reduce our carbon footprints but will also ensure that customers get timely communications regarding various policy events. 84,659 email ids were registered for Go Green during the financial year and 8,89,638 email ids till date.
Surrender Prevention: During FY 2014-15, we have successfully convinced 42,418 policyholders to continue the insurance protection who had visited our branch to surrender their policy.
Helpdesk for Group Insurance customers: A helpdesk has been launched to enable our branches to provide necessary information to group Insurance customers for Group Annuity and Kalyan ULIP products.
Group Customer Self Service portal: Customer Self Service portal was launched to enable customers of Group Insurance policies to view their cover details, generation of premium paid certificate, update contact details and generate fund statement.
(XI) Customer Grievance Redressal
The Company has put in place a Grievance Redressal Policy which is reviewed annually and status update of compliance is placed before the Board/ Management. This policy document lays down various provisions, systems and procedures to ensure prompt redressal of customer grievances through a well defined structure.
In accordance with IRDAI''s Corporate Governance Guidelines, the Company has formed a committee called the Policyholders'' Protection Committee with a view to address various compliance issues relating to protection of the interests of policyholders, and also to keep the policyholders well informed and educated about insurance products and complaint-handling procedures. The Committee is responsible for putting in place proper procedures and effective mechanism to address complaints and grievances of policyholders.
Our Customer Grievance Redressal process has been successfully re-certified for ISO 10002:2004 standards. SBI Life is the second company in the BFSI sector to have its Customer Grievance Redressal process certified for ISO 10002:2004 standard.
The Company''s Grievance Redressal Management System is fully integrated with ''Integrated Grievance Redressal Management System'' (IGMS) of IRDAI. IGMS provides online view of customer complaints and the related TAT (turn-around time). The IGMS also facilitates escalation of complaints, where necessary.
The policyholder can approach the Company through any medium like letter, email, phone calls, SMS, toll free numbers or can directly approach any of the SBI Life branches for redressal of grievance. Grievance officer has been nominated at all the branch offices, regional offices and at the corporate office of the Company. If not satisfied with the resolution provided by the branch, policyholder can contact the customer care desk at SBI Life Regional Office. The policyholder can also seek redressal with Head
- Client Relationship at SBI Life Central Processing Center. The contact details are provided in the policy document and on SBI Life website.
The details of grievance disposal are as under:
|
Particulars |
FY 2014-15 |
FY 2013-14 |
|
Opening Balance at the beginning of the year |
7 |
11 |
|
Add: Additions during the year |
12,279 |
16,062 |
|
Less: Complaints Resolved/Settled during the year |
(12,273) |
(16,066) |
|
Complaints pending at the end of the year |
13 |
7 |
(XII) Information Technology
Keeping in view the changing demands of the customers and their need for flexible service options, SBI Life concentrated on bringing in technological innovations to increase level of conveniences of its customers. Some of the major enhancements / initiatives are as follows:
(a) Infrastructure
As a part of IT modernization replacement of Core PMS (Policy Management System) was initiated. McKinsey was selected in 2014 as the consultant through a formal RFP selection process to independently assess the PMS landscape besides conducting user interviews and comparing with Industry Best Practices. Their recommendations including the migration strategy were duly approved by the Board. Further to this a formal RFP selection process was conducted to evaluate and select the new PMS. Ingenium from HP was selected as the new PMS. INGENIUM®, is a high-performance, Web services-enabled policy administration system that scales to high-volume environments, providing robust, full-function processing for an extensive range of life and investment products.
(b) Process Area
Digital Technologies are changing the way we interact with customers. By 2020, significant portion of our business will be through digital means.
Industry estimates are that by 2020 the average Indian consumer will be under 30 years of age. A billion consumers will have access to mobile phones and half a billion will be actives users of social networking sites.
In order to help us chalk out our road map for our digital journey, we have recently engaged the renowned consultants, M/s KPMG as our digital consultants through a stringent selection process. A governance structure has also been approved by MD & CEO to drive this initiative.
(XIII)Claims
Faster Claims settlement is a very important aspect of customer service for a life insurance company. It is The Moment of Truth. The prominent achievements in the claims area during FY 2014-15 are as follows:
- Improvement in Non Early Death claim processing to average 5.19 Days in FY 2014-15 from 5.86 days in FY 2013-14
- Settlement of Living Benefit claims - increased to 98.36% in FY 2014-15 from 96.16% in FY 2013-14.
- 84.24 % of the living benefit claims were settled on or before due date in FY 2014-15 as against 65.95% cases in FY 2013-14.
(XIV) Investments
Economic activity for Financial Year 2015 marked a new beginning. A new government appointed to run the country with good political strength marks a new beginning in terms of stability. Together we have GDP data (new series) which puts India amongst one of the fastest growing nations across the globe. Commodity prices melt down, especially crude which was down 48% for the year, would go a long way in reducing the mounting oil subsidy for the country. Second time in a row the Current Account Deficit would be around 1.1% of the GDP and currency fall thus, is restricted to 4% versus 10% in the previous year. Sensex ended the year at 27,957, up 24.9%.
In the domestic bond markets, Yield on 10 year Government of India Bond eased by 104 basis points to 7.76% as Reserve Bank of India reduced the policy interest rates by 50 basis points on account of lower trajectory of inflation and persistent weakness of the industrial sector. The recovery of investments remained subdued and as inflation headed lower, RBI had enough room to cut rates and still provide a positive real rate for incentivizing savings.
The new elected government brought about reforms within the first year in power that included increasing FDI limits in Insurance sector, passing of Mining Bill & the MMDR Act. Commitment of the government towards bringing down fiscal deficit in line with the FRBM (Fiscal Responsibility and Budget Management) recommendations has also provided enough boost to market sentiments. The hawkish tone of RBI has been instrumental in achieving the disinflationary trend which saw CPI fall from 8.2% in March 2014 to 5.3% in March 2015 and its strategy to amass foreign exchange reserves by allowing the INR to depreciate has resulted in providing enough buffers against any external volatility and risks.
The Assets under Management (AuM) increased by 22% to Rs, 71,339 crores as at March 31, 2014 from Rs, 58,480 crores as at March 31, 2014. The AuM was made up of Rs, 36,529 crores of traditional funds (including share holders funds) and Rs, 34,810 crores of Unit Linked Funds. The Unit linked portfolio majorly comprises of equity funds and NAV guaranteed funds. The performance of both traditional and unit linked funds was satisfactory with majority of funds, equity and bond funds comfortably beating the benchmark and their respective peers.
(XV) Particulars of Employees
SBI Life has completed 14 years of being in business. The year 2014-15 for SBI Life, has been a period of business outperformance, large scale transformation and strong efforts on managing business. This performance has been the result of the relentless focus and effort that the management team has put in pursuing its strategy.
SBI Life family has grown from 9,114 employees as on March 31, 2014 to 9,657 employees as on March 31, 2015 which depicts a growth of 5.95%. While the average age of employees is 33 years, the average tenure comes up to 3 years 9 months. There was a huge focus on alignment of goals across the organization, communication and leadership development initiatives that have led to strong improvement in business. Various talent acquisition and development interventions like Town-Halls, Individual Development Plans (IDPs), Learning & Development initiatives have been at the centre of HR initiatives during the financial year 2014-15.
To take the Company''s talent management initiatives to the next level, various projects to increase effectiveness of HR subsystems like talent acquisition, Learning and Development, succession planning, employee communication, etc. are being undertaken. Placing higher emphasis on employee engagement activities, the Company continued with the ''Town Hall'' initiative through which the Top Management of the Company interacts with the employees at the grass root levels and tries to understand the employees'' aspirations and expectations from the company. Other initiatives like Sangam (Annual Day celebrations), cross functional offsite and corporate dinners were also organized for the employees to encourage team bonding and camaraderie within the SBI Life family.
In accordance with the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.
(XVI) Internal Audit Framework
The Company has in place a robust internal audit framework developed with a risk based audit approach and is commensurate with the nature of the business and the size of its operations. The internal audit plan covers the process audits as well as transaction based audits at the Head Office, Regional Office and across various branches of the Company.
The audits are carried out by independent firms of Chartered Accountants and also by the audit team of the company. The approach of the audit is to verify compliance with the regulatory, operational and system related procedures and controls. Key audit observations and recommendations made by the internal auditors are reported to the Audit Committee of the Company. It is ensured that the recommendations made by the auditors are implemented by various departments.
(XVII) Board of Directors and Key Managerial Personnel Directors
The composition of the Board of Directors of the Company is an optimum combination of Independent and Non Independent Directors. The Board has strength of ten Directors as on March 31, 2015. The Board has four Independent Directors and six Non-Independent Directors which includes one Executive Director.
Changes during the year
During the year under review, Mr. Atanu Sen, Managing Director & CEO superannuated from SBI and consequently resigned from SBI Life w.e.f. July 31, 2014. Mr. A. Krishna Kumar and Mr. S Vishvanathan, nominee Directors of SBI resigned from the Board of SBI Life w.e.f. November 30, 2014 and April 30, 2014 consequent upon the superannuation from SBI.
The Board placed on record its sincere appreciation for the valuable services and guidance provided by Mr. Atanu Sen, Mr. A. Krishna Kumar and Mr. S Vishvanathan during their tenure as directors of the Company.
Mr. Arijit Basu was appointed as the Managing Director & CEO of the Company w.e.f. August 01, 2014. Mr. V G Kannan and Mr. B Sriram were nominated by SBI as Nominee Directors w.e.f. December 04, 2014 and February 16, 2015 respectively.
In terms of Section 152 of the provisions of the Companies Act 2013, Mr. Pierre de Portier de Villeneuve would retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.
Meetings
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were convened and held, the details of which are given in the Report on Corporate Governance, which is forming a part of this report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013.
Independent directors
The Independent Directors have submitted declarations that they meet the criteria of Independence as provided under Section 149 (6) of the Companies Act, 2013.
In terms of Section 149 and 152 of the Companies Act, 2013, the existing Independent Directors were re-appointed by the members at the 14th Annual General Meeting held on September 22, 2014. The Company has issued formal appointment letters to all the Independent Directors in the manner prescribed under the Companies Act, 2013.
The details of tenure the Independent Directors are given below:
|
Sr. No. |
Name of the Independent Director |
Date of completion of tenure |
|
1. |
Mr. Nilesh Vikamsey |
September 21, 2017 |
|
2. |
Mr. Ravi Rambabu |
September 21, 2017 |
|
3. |
Mr. K. M. Bhattacharya |
September 21, 2015 |
|
4. |
Mr. Raj Narain Bhardwaj |
September 21, 2017 |
A detailed report on the Directors is included in the Corporate Governance report.
Key Managerial Personnel
The Companies Act, 2013 has introduced a new provision relating to appointment of Key Managerial Personnel. Mr. Arijit Basu (Managing Director & CEO), Mr. Sangramjit Sarangi (Chief Financial Officer) and Mr. Aniket Karandikar (Company Secretary) are the Key Managerial Personnel of the Company. Pursuant to the provisions of the Companies Act, 2013 and rules made there under their appointment has been approved by the Board of Directors at its 81st meeting held on June 28, 2014.
Audit Committee
The composition and the functions of the Audit Committee of the Board of Directors of the Company are disclosed in the Report on Corporate Governance, which is forming a part of this report.
Remuneration Policy
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board has approved the remuneration policy as recommended by the Board Compensation Committee. The details of the said policy are annexed as Annexure I to this Report.
(XVIII) Corporate Governance
The Corporate Governance philosophy of the Company is to comply with not only the statutory requirements, but also to voluntarily formulate and adhere to a strong set of Corporate Governance practices which includes code of business conduct, corporate ethics, values, risk management, etc. The Report on Corporate Governance is annexed and forms part of this Annual Report.
(XIX) Corporate Social Responsibility
The Company has constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility) Rules, 2014 which drives the CSR programme of the Company.
The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.
The brief outline of the CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the year have been disclosed in Annexure II to this Report, as mandated under the said Rules.
(XX) Particulars of Loans, Guarantees or Investments
In line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Companies Act, 2013 relating to loans, guarantees and investments do not apply to the Company.
(XXI) Related Party Transactions
During the year under review, the Board has adopted a policy to regulate the transactions of the Company with its related parties.
As per policy, all related party transactions require approval of the Audit Committee of the Board of the Company. Prior approval of the shareholders of the Company is also required for certain related party transactions as prescribed under Companies Act, 2013.
All the Related Party Transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval.
All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 33 of Schedule 16 (C) - Notes to Accounts of the financial statements of your Company.
(XXII) Risk Management
The Company is in the business of covering life risks on payment of a premium. Risk Management therefore becomes an integral part of its business activities. The Company is committed to recognizing and managing its risks in a proactive, ongoing and positive manner. Risk philosophy of the Company is outlined in the Risk Management Policy. The Risk policy specifies the process for identification, measurement and analysis of Company risk exposures; develop risk management strategies and its monitoring. The Risk Management Policy is supported by various other policies pertaining to insurance, market, compliance, outsourcing, fraud risks and business continuity management. All the above policies are reviewed by the Board on an annual basis.
The Company''s Business Continuity Management System (BCMS) is ISO 22301 certified and its Information Security Management System (ISMS) is ISO 27001 certified. The Company has formulated risk appetite statements at the corporate as well as the functional level, which are reviewed and monitored by the Board level Risk Management Committee and Internal Risk Management Committee respectively. The Company also carries out an ICAAP (Internal Capital Adequacy Assessment Process) activity, which details the assessment of material risks, estimation of capital requirement and adequacy for maintaining solvency requirements.
More information on the risk management practices adopted by the Company is available in the ''Enterprise Risk Management'' section appended to this report.
(XXIII) Subsidiaries, Joint Ventures and Associate Companies
Your Company does not have any Subsidiary, Joint Ventures or Associate Company.
(XXIV) Persistency
Persistency is a critical indicator of business viability and brand success. During the FY 2014-15, SBI Life witnessed a Renewal Premium collection of '' 7,338 crores, which contributed to 57.03% of Gross Written Premium. SBI Life has continued to focus on renewals and has undertaken initiatives to improve persistency of its existing policies. The independent Renewal Vertical is focusing on collection of renewal premiums and servicing policyholders. The performance in renewal premium collection led to improvement in the Company''s 37th month persistency by 1,759 basis points and 49th month persistency by 1,447 basis points. We shall continue to accord prime importance to it, now as well as in the years to come.
(XXV) Rural & Social Sector Obligations
As per the regulatory requirements, SBI Life has met its Rural and Social sector obligations for the year under review. As against the minimum requirement of 20%, the Company has issued 22% policies in the rural sector which testifies the Company''s approach towards life insurance inclusion. Further, 65,745 lives covered by the Company are from the underprivileged social sector as against the Regulatory requirement of 55,000 lives. Consequently, the Company has substantially exceeded the minimum social and rural regulatory norms.
(XXVI) Management Report
Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of
Financial Statements and Auditors'' Report of Insurance Companies) Regulations 2000, the Management Report is placed separately and forms part of this Annual Report.
(XXVII) Auditors
In view of the applicability of Section 139 of the Companies Act, 2013 to the Company, it comes under the purview of the Comptroller and Auditor General of India (C&AG). M/s L. S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, appointed by C&AG will retire at the conclusion of the Fifteenth AGM. M/s L. S. Nalwaya & Co., Chartered Accountants and M/s P. Parikh & Associates, Chartered Accountants, are reappointed as Statutory Auditors of the Company for the financial year 2015-16 as advised by the Comptroller and Auditor General of India (C&AG) in accordance with Section 139 of the Companies Act, 2013.
(XXVIII) Auditors'' Report
The Auditors'' Report (including annexure thereof) to the Members does not contain any qualification or adverse remarks. The notes to accounts referred to in the Auditors'' Report are self explanatory and therefore do not call for any further comments u/s 134 (3) (f) of the Companies Act, 2013.
(XXIX) Comments of the Comptroller & Auditor General of India (C&AG) on the accounts of the Company
The Comptroller & Auditor General of India have conducted a supplementary audit u/s 143 (6) (b) of the Companies Act, 2013 of the accounts of the Company for the year ended March 31, 2015. The C&AG vide their report no. GA/ R-I/A/Cs/SBI Life/2014-15/101 dated September 02, 2015 have stated that there is nothing significant which would give rise to any comment upon or supplement to Statutory Auditors'' Report.
The Report of C&AG is being placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.
(XXX) Secretarial Audit
Pursuant to Section 204 of the Companies Act, 2013 readwith Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed V. V. Chakradeo & Co., Company Secretary, Mumbai as the Secretarial Auditor of the Company. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his Report for FY 2014-15. The detailed report on Secretarial Audit of the Company for the FY 2014-15 is enclosed as Annexure III to the report.
(XXXI) Extract of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return (in form MGT 9) as at March 31, 2015 forms part of this report as Annexure IV.
(XXXII) Material changes and commitment affecting financial position of the Company
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.
(XXXIII) Significant and material order passed by Regulators or Courts or Tribunals impacting the going concern status and operations of the Company
During the financial year 2014-15, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
(XXXIV) Directors'' Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013 and the Corporate Governance Guidelines, your Directors confirm that;
a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2015 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the accounts for the current financial year ended March 31, 2015 on a going concern basis; and
e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
(XXXV) Particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo
A. Conservation of Energy
In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134 (3) and Rule 8(3) of Companies (Accounts) Rules, 2014, is not required to be given.
B. Technology Absorption
|
Sr. No. |
Particulars |
Remarks |
|
Research & Development (R&D) |
||
|
1. |
Specific areas in which R & D carried out by the company |
Connect Life is a tablet based application developed for Sales force. This provides Life Insurance need analysis, product recommendation, and benefit illustration for customer to make an informed decision. Using the tab the advisor can do the entire proposal related data capture including KYC document image capture & upload, electronic signature & new business premium payment with integration to online payment gateway. This app is seamlessly integrated with the core system and image document management system of SBI Life. |
|
2. |
Benefits derived as a result of the above R&D |
Connect Life app allows the Advisor to complete the entire sales cycle using the tablet leading to reduction in data entry effort and downstream errors. A copy of the benefit illustrator is immediately available to customer during the interaction. Optimizes the number of customer interaction for a given proposal with scanning of the relevant documents at the proposal stage and completing the new business collection with online payment. SBI Life won ''FINNOVITI - Digital Innovation Award 2015'' for Connect Life. |
|
3. |
Future plan of action |
Extension of Connect life Automated underwriting for STP cases-making real difference to customer experience Extension of this model for servicing customers |
|
4. |
Expenditure on R & D: (a) Capital (b) Recurring (c) Total (d) Total R & D expenditure as a percentage of total turnover |
In-house development. |
|
Technology absorption, adaption and innovation |
||
|
1. |
Efforts, in brief, made towards technology absorption, adaptation and innovation |
Easy Access is a mobile app for customer that can be downloaded from Google playstore. This app enables payment of renewal premium, track their policy anywhere and anytime by accessing our Customer Self Service Portal - MyPolicy, access to SBI Life''s insurance plans, Premium calculators and contact details. Smart advisor application is available in Google play store. Currently application is addressing CIF (Certified Insurance Facilitator: Bank employee), BDM (Business Development Manager: SBI Life employee managing the CIF) and IA (Insurance Advisor). Shortly it would be available for UM (Unit Manager: SBI Life employee managing the IA) too. |
|
Sr. No. Particulars |
Remarks |
|
The salient features of Smart advisor are : |
|
|
Dashboard : with latest Sbi Life News |
|
|
Reports : CIF List with various search facility including |
|
|
1. Policy List |
|
|
2. Policy Maturity List |
|
|
3. Policy Revival List |
|
|
4. Policy Renewal List |
|
|
5. CIF Dashboard |
|
|
Products: All products detailed with detailed description. |
|
|
2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. |
Easy Access app download from google playstore is approximately 1 lakh downloads so far. Through this app Renewal premium collection is registered in excess of '' 4 crore. Smart Advisor app has recorded in excess of 20,000 downloads. Smart Advisor Mobile App for Insurance Advisors won BNP Paribas Cardif Innovation Awards - 2015 in the category "Innovation for Distribution Channels" |
|
3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: |
Nil |
|
(a) Technology imported. |
|
|
(b) Year of import. |
|
|
(c) Has technology been fully absorbed? |
|
|
(d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. |
C. Foreign Exchange Earnings and Outgo
Details of foreign exchange earnings and outgo required under above Rules are as under:
(Rs, Crores)
|
Particulars |
Current Year |
Previous Year |
|
Foreign exchange |
- |
- |
|
earnings |
||
|
Foreign exchange |
59.34 |
40.95 |
|
outgo |
(XXXVI) IRDAI License
The Insurance Regulatory and Development Authority of India (IRDAI) have renewed the annual license of the Company to carry on Life Insurance Business for the financial year 2015-16.
(XXXVII) Other Information
A. Economic Capital
The annual assessment of economic capital of SBI Life was carried out as on December 31, 2014. As a part of this exercise, we have quantified the risk capital requirements relating to various risks such as Insurance Risks (Mortality risk, Lapse Risk, Expense Risk etc.) and Non Insurance Risks (Market Risk, Operational Risk etc.). The cost of guarantee, wherever applicable to some of the products, is also calculated. The aggregate economic capital requirement for the risks of the Company including the guarantees is well within the statutory capital requirement.
B. Solvency Margin
The Directors are pleased to report that the assets of the Company are higher than the liabilities of the Company and the assets are more than sufficient to meet the minimum solvency margin level of 1.50 times, as specified in section 64 VA of the Insurance Act, 1938 read with the IRDA (Assets, Liabilities, and Solvency Margin of Insurance) Regulations, 2000. The Company has a strong solvency ratio of 2.16 as on March 31, 2015 as against the Regulatory requirement of 1.50.
C. IRDAI Directions
IRDAI has issued directions under Section 34 (1) of the
Insurance Act, 1938, to distribute the administrative charges paid to master policyholders vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012 amounting to Rs, 84.32 crores and to refund the excess commission paid to corporate agents vide order no. IRDA/Life/ORD/ Misc/083/03/2014 dated March 11, 2014 amounting to Rs, 275.29 crores respectively to the members or the beneficiaries. The Company has filed appeals against the said directions/orders with the Appellate Authorities [i.e. Ministry of Finance, Government of India and Securities Appellate Tribunal (SAT)]. The said amount is disclosed as contingent liability as at March 31, 2015 in Schedule 16C(1) of the notes to accounts.
D. Appointed Actuary''s Certificate
The certificate of the Appointed Actuary on valuation and actuarial assumptions is enclosed to the financial statements.
E. Certificate from Compliance Officer (under the IRDAI Corporate Governance Guidelines)
A Compliance Certificate, for complying with IRDAI Corporate Governance Guidelines, issued by the Company Secretary, designated as the Compliance Officer under IRDAI Corporate Governance Guidelines, is enclosed and forms part of the Corporate Governance Report.
(XXXVIII) Acknowledgements
The Directors are grateful to the Insurance Regulatory & Development Authority of India, Reserve Bank of India,
Comptroller and Auditor General of India, Securities and Exchange Board of India and Government of India for their continued co-operation, support and advice. The Directors would also like to take this opportunity to express their sincere thanks to the valued customers for their continued patronage.
The Directors also expresses their gratitude for the advice, guidance and support received from time to time, from the auditors and the statutory authorities. The Director expresses their deep sense of appreciation to all employees, insurance advisors, corporate agents & brokers, distributors, re-insurers, bankers and the Registrars who continue to display outstanding professionalism and commitment, enabling the organization to retain market leadership in its business operations. Finally, the Directors also wish to express their gratitude to State Bank of India and BNP Paribas Cardif for their continued support and trust.
For and on behalf of the Board of Directors
Arundhati Bhattacharya
Chairman
Place: Mumbai
Date: September 8, 2015
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