India’s SBI Life posts lower profit as costs rise amid competition

India’s SBI Life Insurance reported a 7% fall in second-quarter profit on Friday, hurt by higher operating expenses and commissions paid to boost sales amid intensifying competition in the sector.

The insurer’s net profit fell to 4.95 billion rupees ($56.3 million) for the quarter ended September 30 from 5.29 billion rupees a year earlier.

Insurance demand has remained strong India, bolstered by rising financial awareness. However, competition has also increased, resulting in insurers paying higher commissions to agents to drive sales.

SBI Life’s expenses, which include operating costs and commissions paid, rose 28% to 27.59 billion rupees.

Its net premium income jumped 22.6% to 248.48 billion rupees, driven by a near 20% rise in premiums from old policies that were renewed.

Rising costs outweighed gains from policy renewals and weighed on the company’s profit.