SBI Life Insurance Company Ltd
Directors Reports
To,
The Members of
SBI Life Insurance Company Limited
The Directors are pleased to present the 23rd Annual Report
of SBI Life Insurance Company Limited ("SBI Life" or "the Company")
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:
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 Rs 673.16 billion due to increase in New Business Premium (NBP) by 16%
to Rs 295.89 billion and Renewal Premium by 13% to Rs 377.27 billion.
Individual Rated premium (IRP) has increased by 18% to Rs 152.19
billion and APE has increased by 18% to Rs 168.15 billion. The Protection New Business
Premium has increased by 19% to Rs 36.36 billion due to increase in credit life business
by 23%.
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% Rs 3.1 trillion with
debt-equity mix of 71:29.
The Company's profit after tax has increased by 14% to Rs 17.21
billion
Indian Embedded Value stands at Rs 460.44 billion with growth of
16%
Value of New Business grew by 37% to Rs 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)" |
|
|
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 Individual 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%.
Distribution reach
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.
Distribution Mix
During the year, the Company has collected New Business Premium of Rs
295.89 billion, comprising of Rs 178.30 billion from 'Bancassurance' which represents
company's largest distribution network, Rs 54.89 billion from Retail Agency and Rs 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, anenergy 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 Management" 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
Expenses" 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 Rs 330 per annum to Rs 436 per annum.
3. COVID 19
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 Rs 2.50 per equity share with face value of Rs 10
each (previous year ended March 31, 2022, interim dividend of Rs 2.00 per equity share
with face value of Rs 10 each). The total interim dividend pay-out amounts to Rs 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
Regulations") 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
5. Capital and Shareholding
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 Rs 20.00 billion and Rs 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').
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 (as amended).
7. Awards & Recognitions
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.
8. Products
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 Rs 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 Rs 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
Customer Engagement
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.
Customer Retention
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.
Claims settlement
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.
Process Quality
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
Data Quality
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.
G rieva nce Redressal
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.
10. Information Technology
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 Initiatives
a. 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.
c. Source Code Review:
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
e. Data Classification Tool:
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.
g. Cert-in compliance:
Integrated all IT systems clock with Cert-in NTP clock server for
having uniform time synchronism as per Cert-in guidelines.
h. Email
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.
B. Process Area
Customer Relationship Management (CRM) system: "CRM
Next" 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.
Mobile Solutions:
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.
Analytics & Machine learning
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
D. Resilient Operations
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.
11. Investments
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 Rs 2,674.09 billion as on March 31, 2022 to Rs 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 Rs 1440.83 billion of traditional funds
(including shareholders') and Rs 1,632.56 billion of unit linked funds. The unit linked
portfolio majorly comprises of equity funds, bond funds and NAV guaranteed funds.
12. Persistency
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 Rs 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.
13. Particulars of Employees
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.
16. Risk Management
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 Year" award at
4th CRO Leadership Summit and Awards, 2022.
3. "CRO of the Year" award at 4th CRO Leadership
Summit and Awards, 2022.
4. 'Recognition' under the category of "Risk Management Team of
the Year" 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.
Concurrent Audit:
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.
Compliance:
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:
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.
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
framework.
Review controls:
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.
Auditor's Report
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
20. Ind AS Implementation
IRDAI ("Authority") 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
Key Managerial Personnel
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 Personnel" of the
Company, under the provisions of Section 203 of the Companies Act, 2013.
Further, in accordance with Corporate Governance Guidelines ("CG
Guidelines") issued by IRDAI the Company has sixteen (16) Key Management Persons
including above mentioned Key Managerial Personnel.
Declaration by Directors
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.
'Fit and Proper' criteria
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.
Common Directorships
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).
Meetings
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.
Secretarial Standards
During the FY 2023, the Company complies with all the applicable
Secretarial Standards issued by the Institute of Company Secretaries of India.
Remuneration Policy
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.
22. 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.
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.
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 2002, the Management Report is placed separately and
forms part of the Annual Report.
28. Statutory Auditors
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:
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 |
In-house development. |
|
(c) Total |
|
|
(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? |
|
|
(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:
Particulars |
FY 2023 |
FY 2022 |
Foreign Exchange Earnings |
0.13 |
2.41 |
Foreign Exchange Outgo |
0.13 |
0.03 |
39. Investor relations
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
41. Integrated Reporting
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.
42. 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.
The license is in force as on March 31, 2023.
43. Other Information
A. 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.
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 2.15 as
on March 31, 2023 (Previous year ended March 31, 2022: 2.05) as against the Regulatory
requirement of 1.50.
C. IRDAI Directions
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 Rs
2,752,948 thousand (previous year ended March 31, 2021: Rs 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 Rs 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 Rs 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 Rs 524,227 thousands along with interest of Rs
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.
44. 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 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.
For and on behalf of the Board of Directors |
Dinesh Kumar Khara Chairman DIN:06737041 |
Place: Mumbai Date: July 28, 2023 |