Q3 Results: HDFC Life’s Premium Grows On Protection And Pension Products

HDFC Standard Life Insurance Co. Ltd.’s third-quarter premium rose on strong performance of its protection and pension businesses.

Net premium grew 27 percent year-on-year to Rs 6,897 crore in the quarter ended December, India’s third-largest private insurer said in an exchange filing. The growth was aided by single premium policies, which rose 64 percent to Rs 2,400 crore due to higher sale of deferred annuity products—insurance contracts for long-term savings.

“The single premium is on the back of our annuity book having grown by four times compared to the same period last year,” said Vibha Padalkar, managing director and chief executive officer at HDFC Life Insurance. This is in line with the insurer’s strategy to focus on non-participating savings segment, including protection and pension policies, she said.

The overall new business premium—a measure of profitability—grew 37 percent to Rs 3,652 crore, aided by the protection business. The premium from protection products—that ensure income to a policyholder’s family in the event of death or illness due to a specified adversity—rose 29 percent to Rs 988 crore, according to BloombergQuint’s calculations. While the company didn’t disclose the new business premium from pension policies, Padalkar said it expects to further expand the share of this portfolio from 7 percent to 8-9 percent in a year.

Income from investments, however, fell 44 percent to Rs 2,345 crore due to lower investments in the unit-linked portfolio, which comprises 60 percent of the overall product mix. “This is nothing but movement in equity markets and this is a pass through for the company. It is profit-neutral because it is in the unit-linked segment,” said Padalkar.

The insurer, she said, also plans to focus on protection and pension policies, along with single premium unit-linked product for business communities. It aims to beat the industry growth and focus on innovation of new products and strengthening its bancassurance channel through new partnerships, Padalkar said.

Other Highlights:

(Q3, year-on-year)

• Profit after tax rose 18 percent to Rs 246 crore
• Renewal premium grew 18 percent to Rs 3,309 crore.
• Individual new business grew 32 percent to Rs 1,886 crore.
• Group new business premium grew 43 percent to Rs 1,767 crore.
• 61st-month persistency remained stable at 49.1 percent, 49th-month persistency improved to 65.2 percent from 57.9 percent.
• Value of new business margin stood at 23.5 percent against 21.7 percent.

Watch the full interaction with the management here: