Captain Speaks     

Published: November 30, 2023
Updated: November 30, 2023

HDFC Life Insurance Company

‘Premium growth up 12% in Q2FY24

“We expect healthy growth in the second half of fiscal 2024 driven by the acquisition of mac customers and growth in the sale of policies.” Analysing the performance of the company during Q2 FY2024, she said, “The company has recorded a healthy growth of 10% in individual WRP against 8% for the overall industry for H1FY 2024. The marketshare was 15.7% in the private and 10.3% in the overall sector. The company has continued to grow faster than the overall industry and is ranked amongst the top 3 life insurers across individual and group businesses.

The company also saw an uptick of 10% in the number of individual policies sold, beating industry growth. This healthy volume growth is in line with our stated objective of broadening our customer base. The company has insured more than 3 crore lives across individual and group businesses, which represents a YoY growth of 16%. More than two-thirds of the customers on-boarded are new customers. And half of the new customers are below the age of 30 years.”

TIERS 2,3 GROWTH

According to her, the growth in Tier 2 and 3 locations is double the Tier 1 location growth. Growth in protection was robust at 28% on a new business premium basis. Retail protection registered a YoY growth of 46% in H1FY24. Sum assured recorded healthy growth, with retail and overall sum assured growing by 61% and 45% respectively. The company has continued to lead in terms of sum assured, and private marketshare based on overall sum assured stood at 18% for H1FY24.

Annuity APE grew by 17% and the segment contributed to 18% of new business premium. Annuity and Protection put together contributed to about 55% of new business premium in H1FY24. The company has introduced 2 new products in the protection category -- HDFC Life Sanchay Legacy and Click 2 Protect Elite. HDFC Life Sanchay Legacy is an industry-first whole life, return of premium, protection plan with increasing life cover and is designed to cater to a middle-aged-andbeyond customer segment. The company has witnessed an increase in the share of ULIP products to 28% of individual APE. The VNB margins were steady for H1FY2024, which were impacted due to changes in the product mix and increased cost ratio

Referring to HDFC Bank, Ms Padalkar pointed out that the bank has exhibited significant traction in the wallet share rising to 62% during H1FY24, due to increased distribution strength of the bank and the introduction of new products in the HDFC Bank channel. The company has partnered with Airtel Payments Bank with 1.5 million customers and added more than 37,0000 agents during H1FY24. “We are confident about the medium- to long-term growth opportunities, and expect to emerge strong. We expect flat VNB margins for FY24, similar to FY23. The company expects margins to improve in FY2025. Non-par product repricing is a continuous process and this year the company has repriced the products twice.”

HIGH-POLICY DIP

According to her, the contribution of high ticket-sized policies of above Rs 5 lakh has declined to 6% in H1FY24 from 12% of APE in FY2023. The premium from sales of policies above Rs 5 lakh declined 20% and below Rs 5 lakh has increased 18%. The company expects a recovery in sales of policies above Rs 5 lakh in H2FY2024. Referring to the impact of new initiatives, she said the merger of Exide and the recent partnerships with banks with

a strong presence in low-tier locations has strengthened the overall distribution of the company in low-tier cities. On a consolidated basis, the company has posted a 15% increase in net profit to Rs 378.20 crore in the quarter ended September 2023 (Q2FY2024). The company has maintained its market leadership position as a ‘top three’ life insurer across individual and group businesses. It has recorded a growth of 10% in individual WRP, which is higher than the 8% growth for the overall industry for the half-year ended September 2023. H1FY24 marketshare was 15.7% and 10.3% in the private and overall sector respectively.

The company continued to grow faster than the overall industry and was ranked amongst the top 3 life insurers across individual and group businesses. The embedded value is Rs 42,908 crore, with an operating return on embedded value of 16.4% for H1FY2024, up from 16.0% in Q1FY2024. AUM of the company increased 18% to Rs 2,64,870 crore at end-September 2023 from Rs 2,24,901 crore at end- September 2022 crore, and also moved up from Rs 2,53,301 crore at end-June 2023. The consolidated net worth stood at Rs 13,390 crore at end-September 2023, while the solvency ratio of the company was at 194% at end-September 2023. Embedded Value per share stood at Rs 199.6 per share at end-September 2023.