HDFC Life first quarter net up 21% on premium income

HDFC Life’s net profit surged 21 per cent year-on-year (YoY) to Rs 365 crore in the April-June quarter of FY23, aided by lower mortality reserves and healthy jump in value of new business (VNB). In the year-ago period, it had reported a net profit of Rs 302 crore.

Its VNB rose 25 per cent to Rs 510 crore in Q1FY23, over the same period a year ago, while annualised premium equivalent (APE) grew 22 per cent to Rs 1,904 crore.

VNB is the present value of future earnings from policies issued during a period. It reflects the additional earnings expected to be generated through the new policies issued. APE is the sum of the total value of regular–or recurring–premiums plus 10 per cent of any new single premiums written for the fiscal year.

VNB margins, a measure of profitability of life insurance companies, of the insurer stood at 26.8 per cent in Q1FY23, up 60 basis points from the year-ago period. In FY22, its margins were 27.4 per cent.

Total premium of the insurer, which includes new business premium as well as renewal premium, grew 23 per cent YoY to Rs 9,396 crore in Q1FY23.

Solvency ratio of the insurer stood at 178 per cent in Q1FY23, slightly above the regulatory requirement of 150 per cent. It is the ratio of available solvency margin to required solvency margin.

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