SBI Life Insurance IPO - Information Analysis

Note: This article has no recommendation to either buy or avoid this IPO. Instead, we have presented all the relevant information based on which you can make your own decision. One more note: As regular readers of our IPO analyses would have noticed, we do not approach insurance IPOs in the same format that we use for non-financial companies. The reason is that a large proportion of the questions are irrelevant to these companies. This is partly because of the tight nature of the regulatory environment they operate in, and partly due to the complex, long-term risks that they face. Investing in Indian insurance companies is still a novel activity, and there will likely be surprises ahead that neither analysts nor investors can predict at this point. SBI Life Insurance is one of India’s largest ‘private’ life insurers in terms of new business premiums, second only to the publicly-owned behemoth LIC. We say ‘private’ because it is owned only indirectly, rather than directly by the State through the State Bank of India (SBI). It’s been around since 2001 and was launched as a joint venture between SBI and BNP Paribas (one of France’s largest banks). The company collected premiums worth Rs 21,000 crore in 2017. Its new business premiums grew at a 15% CAGR over the past 10 years (renewals grew at a whopping 40%). Before 2000, the life insurance business consisted of a single player - LIC (Life Insurance Corporation of India). The LIC stil