Archive · 24 Jul 2026
SBI Life's Costs Rise Due to Tax and Labour Rules
SBI Life Insurance Co.
saw its costs go up in the June quarter because of new tax rules and labour laws.
Even though their expenses increased, their profit grew by 22%.
The company's costs went up because of a tax exemption that cost them ₹230 crore and new labour rules that increased employee costs.
Despite these challenges, they made more money from new business and a big group protection deal.
The company plans to adjust their product mix to handle the tax impact rather than cutting costs.
They expect their profit margins to improve as things normalize.
SBI Life's operating cost ratio increased to 7.7% from 6.3% due to GST exemption and new labour rules.
Profit after tax rose by 22% to ₹720 crore, and new business premium grew by 23% to ₹8,910 crore.
The GST exemption cost the insurer ₹230 crore, reducing the value of new business margin by 1.1 percentage points.
Growth was aided by a large group protection deal, pushing group protection APE up 313% to ₹1,230 crore.
The company plans to rely on a change in product mix rather than cutting commissions or costs to address the tax impact.
- Who
- SBI Life Insurance Co.
- What
- Increased cost ratios due to GST exemption and new labour rules, along with growth in profit and new business premium.
- When
- June quarter, with impact continuing into the September quarter.
- Where
- India
- Why
- Due to GST exemption on individual life policies and new labour rules raising expenses.
Impact of Tax Exemption and Labour Codes
Growth and Profitability
Cost Ratios
Impact of Tax Exemption and Labour Codes
The operating cost ratio increased to 7.7% from 6.3%, and the total cost ratio rose to 12% from 10.8% due to GST exemption and new labour rules.
Growth and Profitability
Profit after tax rose by 22% to ₹720 crore, and new business premium grew by 23% to ₹8,910 crore.
Product Mix
Impact of Tax Exemption and Labour Codes
The GST exemption cost the insurer ₹230 crore, reducing the value of new business margin by 1.1 percentage points.
Growth and Profitability
The company plans to rely on a change in product mix rather than cutting commissions or costs to address the tax impact.
Growth Drivers
Impact of Tax Exemption and Labour Codes
The impact of the exemption will continue into the September quarter before normalizing in the third quarter.
Growth and Profitability
Growth was aided by a large group protection deal, which pushed group protection APE up 313% to ₹1,230 crore and helped total APE grow 36%.
- Operating Cost Ratio
- 7.7%
- Total Cost Ratio
- 12%
- Profit After Tax
- ₹720 crore
- New Business Premium
- ₹8,910 crore
- Group Protection APE Growth
- 313%
- Total APE Growth
- 36%
- ULIP Share
- 45% of individual savings APE
- Reinsurance Premium Ceded
- ₹1,210 crore