Mumbai:
HDFC Life Insurance reported a smaller-than-expected rise in fourth-quarter profit on Wednesday, as higher expenses more than offset the rise in income from premiums.
The Mumbai-based insurer said its standalone profit after tax rose a marginal 0.3% to Rs 359 crore for the quarter ended March 31.On a sequential basis, net profit for the quarter rose 14% from Rs 315 crore reported in the preceding December quarter.
Analysts, on average, had expected a profit of Rs 373 crore, as per Refinitiv IBES data.
The net premium income of the insurer increased to Rs 19,426.57 crore compared to Rs 14,289.66 crore.
The board has recommended a final dividend of Rs 1.90 per equity share of face value Rs 10 each for the financial year 2022‐23.
The life insurer’s new business margin for the year was 27.6% thereby delivering value of new business of Rs. 3,674 cr. which is a growth of 37%.
The sale of pricier policies jumped in March after the government said it would withdraw tax incentives on such policies issued from April. That contributed to a 35.9% rise in net premium income to Rs 194,27 crore.
The government said it would now tax the total returns on the maturity of life insurance policies if the aggregate premium topped Rs 500,000 a year.
However, ballooning expenses offset this rise in income.
Vibha Padalkar, MD & CEO said, “The Reserve Bank of India (RBI) has permitted HDFC Bank or HDFC Ltd to increase their shareholding in HDFC Life to more than 50% prior to the effective date, thus clearing any uncertainty around HDFC Bank’s eventual shareholding in us. We look forward to collaborating with our parent to be, towards creating value for all stakeholders.”
There has been an increase in protection share in total NBP from 24% in FY22 to 29% in FY23 for the insurer.
“Our overall protection APE grew by about 20% in FY23. Margin neutrality, after considering the acquired business, was achieved well ahead of the target,” said Padilkar.
The life insurer’s embedded value(EV) stood at Rs 39,527 crore as on March 31, 2023, with an operating return on embedded value of 19.7% for FY23.