HDFC Life Insurance posts 11.7% growth in Q1 net profit

An 11.7% year-on-year (YoY) growth for the first quarter ended in June has been posted by HDFC Life Insurance, along with standalone net profit at Rs 424.62 crore, driven by new business premiums growth. Compared to 24.2% a year ago, new business margins increased to 29.8% in Q1FY20. The 13th-month persistency increased to 88.8% in Q1FY20 from 85% in the year-ago period. While, the individual annualised premium equivalent (APE) increased by 64% YoY to Rs 1,378 crore in Q1, the new business premium increased by 47% YoY to Rs 3,926 crore in the June quarter. The June quarter has witnessed a stark change in HDFC Life’s product mix. Unit-linked products mix declined to 26% of individual APE in Q1 compared to 54% a year ago. Meanwhile, the share of non-par savings grew to 63% in Q1FY20 from 11% in Q1FY19. Vibha Padalkar, MD & CEO said, “We have recorded stellar top-line growth, with strong traction witnessed across savings, protection and retirement solutions whilst maintaining our focus on profitability. Our diversified distribution mix coupled with product innovation has helped us address niche customer segments and emerging profit pools.” He added that the company has stepped up efforts within the protection and retirement space, which she expects would fuel growth over market cycles. Under management, the private life insurer’s assets stood at Rs 1.3 lakh crore and a debt-equity mix of 62-38 as on June 30. For the same period, almost 96% of debt investments are in government securities (G-Sec) and AAA bonds. Operating return of HDFC Life on embedded value (EV) stood at 19.9% in Q1 compared to 18.4% a year ago.