SBI Life eyes stable margins in FY26 as it shifts focus to traditional products from market-linked plans

SBI Life expect margins should stay in the 27–28 percent range through FY26

SBI Life saw a strong improvement in margins during the March quarter (Q4FY25), even though growth in net profit was weak. This margin expansion was largely driven by a better mix of products. Looking ahead to FY26, the company expects margins to remain steady in the range of 27–28 percent, as it shifts more focus towards traditional insurance products and away from market-linked ULIPs.

In their analyst conference call, the management shared that they are aiming for a product mix of about 65 percent ULIPs and 35 percent traditional policies. The traditional category includes participating (par), non-participating (non-par), and protection products. This marks a 5 percentage point shift from ULIPs, which accounted for 70 percent of the mix in FY25.

The management also reiterated that they had previously guided for a margin of 28 percent for Q4FY25, which they were able to deliver. They believe margins should stay in the 27–28 percent range through FY26, unless there are any major one-time shifts during the year.

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The shift in product mix is being supported by a wider product offering. Unlike previous instances where margin improvement depended on a single product, this time SBI Life has launched four new products targeted at different customer needs, such as guaranteed return plans and children's policies. Early signs in the first month of FY26 suggest these products are receiving a positive response.

While ULIPs are known for offering market-linked growth, they tend to carry lower margins compared to traditional savings products like par and non-par plans. This is why the company is focusing on expanding its non-ULIP portfolio.

“We’ve introduced new non-ULIP products as part of our strategy to improve margins and offer better value to our agents and partners,” the management said. “This shift has been gradual but intentional, and we believe it will contribute positively to margins over time.”

Among the latest offerings is Smart Platina Supreme — a non-linked, non-participating savings plan that provides life cover along with guaranteed payouts. The plan is designed for customers looking for future income certainty.

SBI Life’s value of new business (VNB) margin rose sharply by 240 basis points to 30.5 percent in Q4FY25, up from 28.1 percent in the same quarter last year.

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