“Despite the recent budget changes that were perceived to be unfavourable for the sector, the life insurance industry has demonstrated remarkable resilience,” HDFC Life’s CEO Vibha Padalkar said


India’s HDFC Life Insurance Company reported a 15.5% rise in second-quarter net profit on Friday as premium collections gained despite increased taxation on high-value life insurance.

The Mumbai-based insurer’s profit after tax rose to Rs 3.77 billion ($45.30 million) for the quarter ended Sept. 30, from Rs 3.26 billion a year ago, it said in an exchange filing.

While its total premium grew 12 per cent to Rs 26,613 crore, new business premium rose 11 per cent to Rs 12,970 crore against a 21 per cent de-growth for the industry. Of the total premium, individual premium rose 11 per cent to Rs 4,478 crore.

The insurer posted a 10% growth in individual weighted received premium compared with 8% growth for overall industry for the half year ended Sept. 30.

HDFC Life MD and CEO Vibha Padalkar, describing the numbers as expected in a seasonally weak quarter, told PTI that the company’s margins remained flat in the quarter at 26.3 per cent, while the value of new business rose 4 per cent to Rs 801 crore, while the embedded value stood at Rs 42,908 crore.

“Despite the recent budget changes that were perceived to be unfavourable for the sector, the life insurance industry has demonstrated remarkable resilience,” said Padalkar

Shares of HDFC Life were up 0.11% to 625.4 rupees at 02:40 p.m. IST. The stock fell 2.1% during the September quarter.

The HDFC Bank group company said its overall annualised premium equivalent (APE) rose 7 per cent to Rs 3,045 crore, while the total topline grew 10 per cent, helping it retain its market share flat at 10.3 per cent.

However, with LIC sharply losing its market share by as much as 10 percentage points to 58 per cent in the quarter, it helped the private life insurer become the third largest in terms of market share after LIC and SBI Life.

Analysts believe the insurer’s growth is backed by product innovation, a diversified distribution channel and strong support from its parent, HDFC Bank.

The company’s value of new business, which measures expected profit from new premiums, grew 10% during the fiscal first half.

Analysts at Jefferies said that the sales partnership with its parent has aided growth in premiums.

The partnership contributed 65% to HDFC Life’s distribution mix for the first half of the financial year.

The rise in quarterly profit was despite the government’s plan to withdraw tax incentives on high-value life insurance from this fiscal.

Still, the company saw a 12.6% rise in net premium income in the September quarter.

During the quarter, the company added almost 1.7 crore new lives being covered through life and annuity policies collectively rising 17 per cent, while protection premiums rose by 28 per cent, driving the embedded value growth by 19 per cent, she added.

Its sum assured rose 65 per cent to Rs 6.5 lakh crore, making it the top private player on this front. This was led by a 46 per cent rise in retail protection annual premium, while assets under management rose 18 per cent to Rs 2.65 lakh crore.

Brokerage Motilal Oswal said that among life insurance companies, HDFC Life and its peer SBI Life outpaced other private players for a third month in September.