SBI General Insurance Financials & Annual Report

SBI General Insurance Company Ltd Balance Sheet (Rs in Thousands)

SBI General Insurance Company Ltd Profit & Loss Statement (Rs in Thousands)

 SBI General Insurance Company Ltd Cash Flow Statement (Rs in Thousands)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flows from Operating Activities

The company generated substantial cash inflows from premium received from policyholders, totaling ₹14,96,99,524 thousand, up from ₹12,02,21,880 thousand in the previous year. However, significant outflows were made toward payments to reinsurers, claims, commissions, and brokerages, which amounted to major cash outflows, including ₹7,59,76,473 thousand for claims and ₹1,68,00,210 thousand for commissions. Operating expenses also included payments like GST, staff loans, and retirement benefits. Despite these substantial expenses, the company recorded a strong net cash inflow from operating activities of ₹2,00,47,710 thousand, showing a considerable improvement from ₹1,49,80,986 thousand in 2022-23, driven primarily by increased premium collections.

Cash Flows from Investing Activities

Investing activities resulted in a net cash outflow of ₹-3,15,60,148 thousand in 2023-24, a significant increase from the previous year 's outflow of ₹-1,36,08,165 thousand. The major outflows were driven by the purchase of investments (₹12,92,52,067 thousand) and fixed assets (₹10,10,992 thousand). On the other hand, the company generated inflows from the sale of investments (₹9,50,71,055 thousand) and earnings from rent, interest, and dividends on investments (₹92,04,888 thousand). The large net outflow indicates substantial reinvestments, particularly in financial assets.

Cash Flows from Financing Activities

Financing activities saw a significant boost in 2023-24, with a net cash inflow of ₹1,53,84,783 thousand, compared to just ₹16,770 thousand in the prior year. This was driven by proceeds from the issuance of share capital (₹84,48,663 thousand) and borrowings of ₹70,00,000 thousand. The company also paid interest on debentures (₹63,880 thousand), but the overall inflows highlight a strong financing position, indicating growth in equity and debt financing.

Net Increase in Cash and Cash Equivalents

Despite the significant outflows from investing activities, the strong inflows from operating and financing activities resulted in a net increase in cash and cash equivalents of ₹38,72,345 thousand for the year. The company’s cash position at the start of the year was ₹61,99,621 thousand, increasing to ₹1,00,71,966 thousand by the end of the year. This reflects a marked improvement in liquidity, driven primarily by successful fundraising and strong operational cash generation.

Financial Ratios of SBI General Insurance Company Ltd

Here is a summary of the financial and operational metrics for SBI General Insurance Company Ltd for the year 2024 and 2023:

Gross Premium Growth Rate

The gross premium growth rate measures the year-over-year increase in gross premiums collected by the company. In 2024, the growth rate was 15.93%, down from 18.13% in 2023. While the company continues to experience growth in premium collection, the slower growth rate may suggest a more competitive market environment or a stabilization in the company’s business expansion.

Net Retention Ratio (%):

The net retention ratio represents the percentage of premiums that the company retains after ceding a portion to reinsurers. It increased significantly from 52.77% in 2023 to 66.76% in 2024, indicating that the company retained a larger portion of its premiums. This higher retention suggests that the company is assuming more risk, likely due to favorable underwriting conditions or confidence in its risk management capabilities.

Net Commission Ratio (%):

The net commission ratio reflects the percentage of net premiums that the company spends on commissions. The ratio increased sharply from 1.07% in 2023 to 8.48% in 2024, indicating a higher commission expense relative to premiums. This rise may reflect changes in distribution channels, higher broker commissions, or a more aggressive strategy to drive premium growth.

Expenses of Management to Gross Direct Premium Ratio (%):

This ratio shows the percentage of management expenses relative to gross premiums. In 2024, the ratio stood at 22.42%, up slightly from 21.35% in 2023. The marginal increase suggests that management costs grew at a pace slightly higher than premium growth, indicating potential inefficiencies or increased costs in managing the business.

Expenses of Management to Net Written Premium:

This ratio measures management expenses as a percentage of net written premiums. The ratio improved from 40.23% in 2023 to 33.12% in 2024, suggesting that while management expenses increased in absolute terms, they decreased as a proportion of net premiums. This indicates better control over costs relative to the premiums the company retains.

Net Incurred Claims to Net Earned Premium (%):

This ratio represents the percentage of claims paid out relative to the net premiums earned by the company. The ratio increased from 78.73% in 2023 to 85.90% in 2024, indicating a higher claims burden relative to earned premiums. This increase may reflect higher claims frequency or severity, which could signal adverse market conditions or less favorable underwriting outcomes.

Combined Ratio (%):

The combined ratio measures the overall underwriting profitability by combining claims and management expenses as a percentage of earned premiums. In 2024, the combined ratio was 108.23%, up from 106.73% in 2023. A combined ratio above 100% indicates an underwriting loss, meaning the company paid out more in claims and expenses than it earned in premiums, pointing to declining underwriting performance.

Operating Profit Ratio (%):

The operating profit ratio indicates the company’s profitability from its core insurance operations. In 2024, the ratio turned negative at -1.06%, compared to a positive 2.78% in 2023. This shift indicates that the company incurred an operating loss, likely driven by increased claims and higher management costs.

Net Earnings Ratio (%):

The net earnings ratio measures the company’s net profit relative to its total revenue. It decreased slightly from 3.21% in 2023 to 2.82% in 2024, indicating a small reduction in overall profitability. Despite a higher claims ratio and negative operating profit, the company managed to retain some profitability, though at a lower level.

Return on Net Worth (%):

The return on net worth (RONW) shows how effectively the company is generating profits from shareholders ' equity. The ratio declined marginally from 6.02% in 2023 to 5.79% in 2024, reflecting slightly lower returns for shareholders. This drop could be attributed to weaker operating performance and rising claims.

Solvency Margin (Times):

The solvency margin measures the company’s financial stability by comparing its available capital to the minimum required capital. The solvency margin improved significantly from 1.72 times in 2023 to 2.25 times in 2024, indicating that the company strengthened its capital position. A higher solvency margin reflects better financial health and the company’s ability to absorb potential losses, ensuring compliance with regulatory requirements.