Vibha Padalkar, MD & CEO said,“In Q3 fy2022-23, we grew by 17% in terms of Individual Weighted received premium( WRP). On a year to date (YTD) basis, we grew by 13% leading to a market share of 15.8% amongst private insurers. Our distribution network has been growing with time, as we build newer, long-lasting partnerships.”
Padalkar said if the proposed amendments to the Insurance Act, which seek to allow composite licence and a host of other pro-business changes like allowing banks to sell products of multiple insurers unlike the present cap of three, and also permitting insurers to sell all financial products, is cleared in the Budget session of Parliament, HDFC Life will shortly resume health insurance services.
Mumbai;
HDFC Life on Friday reported a 15 per cent increase in net profit to Rs 315 crore for the third quarter ended December.
The private sector insurer’s profit stood at Rs 274 crore in the year-ago period, it said in a regulatory filing.
The insurer’s net premium income rose by 18.6 % year on year to of Rs 14,379.38 crore in Qsfy2022-23 from Rs 12,124.36 crore in Fy 2021-22.
Its first-year premium stood at Rs 2,724.87 crore, up from Rs 2,115.97 crore, and the renewal premium soared to Rs 7,187 crore from Rs 5,543.03 crore.
Vibha Padalkar, MD & CEO said,“In Q3 fy2022-23, we grew by 17% in terms of Individual Weighted received premium( WRP). On a year to date (YTD) basis, we grew by 13% leading to a market share of 15.8% amongst private insurers. Our distribution network has been growing with time, as we build newer, long-lasting partnerships.”
WRP stands for the sum of first year premium received during the year and
10% of single premiums including top-up premiums.
She said if the proposed amendments to the Insurance Act, which seek to allow composite licence and a host of other pro-business changes like allowing banks to sell products of multiple insurers unlike the present cap of three, and also permitting insurers to sell all financial products, is cleared in the Budget session of Parliament, HDFC Life will shortly resume health insurance services.
HDFC Life expects its margins to improve further in the fourth quarter, having already neutralised the hit it had taken from the merger of Exide Life three quarters earlier than expected.
The company closed the December quarter with a new business premium margin of 26.8 per cent. Its FY22 VNB (value of new business) margin stood at 27.4 per cent and the management is confident of reaching there or making a further improvement as it closes the current fiscal.
Total income increased to Rs 19,693 crore in the latest December quarter from Rs 14,222 crore in October-December 2021.
The company’s solvency ratio too improved to 209 per cent from 190 per cent as on December 31, 2021. The regulatory requirement is 150 per cent.
For the nine months period ended December, the life insurer posted a profit Rs 1,001 crore as against Rs 850 crore in the corresponding period a year ago.
Its embedded value scaled up massively to Rs 37,702 crore from Rs 29,543 crore and the value of new business rose to Rs 2,163 crore from Rs 1,780 crore.
“We maintained market leadership in credit life by delivering strong growth of 52%, across nearly 300 partnerships. Whilst growth in retail protection remained tepid on a year on year basis, we saw sequential growth of 13% in Q3. With a combination of data analytics, insights into customer profiles and calibrated risk retention, overall protection APE grew by over 20% in Apr-Dec period of FY23 and we expect individual protection to continue picking up in the coming quarters. said Padilkar.
Annualized Premium Equivalent (APE) for a life insurnace company stands for the sum of annualized first year regular premiums and 10% weighted single premiums and single premium top-ups.
On the retirement front, HDFC Life has steadily gained market share in the annuity business. its annuity business in 9M FY23 grew by 22% on received premium basis compared to a 1% growth for the industry.
Commenting on the performance of the company in the first nine months, Padilkar said, “Insurance as a sector continues to be a beneficiary of a relatively robust economy, stable savings trends and favourable regulatory regime. Against this backdrop, we continue to maintain a steady growth trajectory. Despite intense competition, we have consistently been ranked amongst the top 3 life insurers across individual and group businesses.”
The life insurer’s agency channel continued to grow faster clocking more than 2x company level growth in individual APE in Apr-Dec period of the year.
The share of the channel has increased from 14% to almost 18% in the merged entity.
At 26.8 per cent, the VNB margin is already at the pre-merger level, neutralising the impact of the merger of Exide Life (in Q2 FY23) almost three quarters earlier than planned, said Vibha Padalkar, the managing director and chief executive of the insurer.
Though it is flat on-year, and down from the 27.4 per cent it had in FY22, having already neutralised it so early, the company hopes to improve it further to take it to the FY22 level of 27.4 per cent or even better it in the March quarter, Padalkar PTI over the weekend, without quantifying a number.
She said the VNB climbed 20 per cent to Rs 877 crore in the December quarter, boosted by a healthy 52 per cent growth in the credit life (loan protection policies) portfolio to Rs 5,200 crore.
Given the demand for such products from individual customers and NBFCs, she expects this segment to top Rs 6,000 crore by March.
The other revenue booster, she said, was protection products which clipped at 13 per cent and cornered a 14 per cent income share. Non-participating products still continue to hold the major revenue share at 42 per cent, followed by participating products and ULIPs at 22 per cent each. Annuity products got 6 per cent of the top-line.
Padalkar said with a combination of data analytics, insights into customer profiles and calibrated risk retention, overall protection premium grew by over 20 per cent.
On the retirement front, HDFC Life has steadily gained market share in the annuity business which grew 22 per cent on a received premium basis compared to a 1 per cent growth for the industry.
The company also recorded healthy growth in both new business premium as well as renewal premium at Rs 18,713 crore and Rs 19,194 crore so far this financial year, compared to Rs 17,075 crore and Rs 14,467 crore respectively in the same period last fiscal.
Its total premium stood at Rs 37,907 crore as of December 2022 up, from Rs 31,542 crore in December 2021.