SBI Life Q2 Results: Profit falls 7% YoY amid rise in costs, drop in investment income

SBI Life Insurance reported a 7% year-on-year decline in net profit for the second quarter of FY26, as rising operational costs and a sharp fall in investment income weighed on earnings. The company’s performance reflects the challenges insurers face amid fluctuating financial markets and increasing expenses.

The life insurer’s net premium income rose 22.6% to ₹24,848 crore, bolstered by a nearly 20% growth in policy renewals. Despite this increase in revenue, rising costs dented profitability. Operating expenses and commissions surged 28% to ₹2,759 crore, reflecting higher spending on business operations and distribution. Investment income for the half-year ending September 30 fell dramatically to ₹20,060 crore from ₹39,630 crore in the same period last year, impacted by slower equity market performance and subdued returns on investment portfolios.

Despite the decline in net profit, SBI Life’s value of new business (VNB) increased 14.5% to ₹1,660 crore, and the VNB margin improved to 27.8% from 26.8% a year earlier. Analysts highlighted that this demonstrates the company’s ability to maintain healthy margins even amid revenue and investment pressures.

In response to market volatility, SBI Life has strategically adjusted its product mix. The company reduced the proportion of market-linked Unit Linked Insurance Plans (ULIPs) to 57% from 63% last year, focusing more on higher-margin non-participating products. This shift is aimed at mitigating the impact of unpredictable equity markets on overall profitability and ensuring more stable long-term growth.

Industry experts remain optimistic about SBI Life’s prospects, citing the strong underlying demand for life insurance in India and the company’s efforts to enhance product profitability. While short-term earnings were affected by costs and market conditions, SBI Life’s strategic adjustments are expected to support sustainable growth and resilience in the coming quarters.

The results highlight the delicate balance life insurers must maintain between revenue growth, cost management, and investment performance in a dynamic economic environment.