HDFC Life PAT up by 17.4% to Rs 2.87 bn, assets under management grow 14%

HDFC Standard Life Insurance posted a profit-after-tax (PAT) growth of 17.4 per cent to Rs 2.87 billion in the quarter-ended September 2018 as against Rs 2.385 billion in the corresponding period of the previous financial year. 

Net Premium Income grew by 25.7 per cent from Rs 53.9 billion in Q2 FY2018 to Rs 67.8 billion at the end of Q2 FY2019. 

New Business Premium income grew by 43 per cent, year on year, from Rs 44 billion in H1 FY2018 to Rs 62.9 billion at the end of H1 FY2019. Group premium new business premium has increased by 36 per cent from Rs 23.4 billion in H1 FY2018 to Rs 32 billion as of H1FY2019.

Individual Annualized Premium Equivalent (APE) grew 13 per cent from Rs 18.5 billion  in H1FY2018 to Rs 21 billion, at the end of H1FY2019. 

"Our focus remains on profitable growth both on a channel and product basis. In terms of product segment, we continue to address the three tenets of protection namely, mortality, morbidity and longevity. If market weaknesses were to sustain for a longer time period it might adversely impact the velocity of flows into market linked products," says Vibha Padalkar, managing director and chief executive officer at HDFC Standard Life. 

Protection-based policies (on the basis of APE) now comprise 16.2 per cent of the company's business share in H1FY2019 as against 11.8 per cent in H1 FY2018. 

In terms of the product mix: the share of Unit-Linked Insurance Plans has increased by 100 basis points to 59 per cent, while non-participating savings products account for 11 per cent of the business in H1FY2019 as compared to 8 per cent in H1 FY2018. 

Overall new business margins have improved by 190 basis points to 24.3 per cent at the end of H1 FY2019. 

Assets under Management have grown 14 per cent from Rs 995.3 billion at the of H1FY2018 to Rs 1,132.3 billion at the end of H1 FY2019. Around 62 per cent of assets are invested in debt instruments, while the rest are placed in equity investments. 

"The last few weeks have been testing times for the economy from a macro perspective given the volatility in the currency, liquidity concerns in the housing finance and non-bank space and crude prices. The weakness is reflected in both equity and debt market. Despite these factors we have maintained our leadership position," Padalkar said. 

The solvency ratio decreased from 201 per cent in Q2 FY2018 to 193 per cent at the end of Q2 FY2019. 

"We have a proven track record of delivering consistent results across business cycles and the ability to comfortably weather changes at the macro, regulatory and market levels. We shall continue to pursue our strategy of harnessing newer pools of profitability as well as deliver the best value proposition to our partners, customers and shareholders," she said. 

The 13th month persistency ratio  marginally decreased from 86.2 per cent in Q2 FY2018 to 84.8 per cent as of Q2 FY2019, 

While the 61st month persistency ratio has improved from 50.5 per cent to 52.5 per cent during the same period. 

As of September 30, 2018 HDFC Life commands a market share of 21.2 per cent amongst private sector platers and number insures the lives of 21.6 million people. 

The insurer has 23 bank partners the latest being Vijaya Bank and 119 NBFCs, with Fullerton India being the newest addition to its distribution network. 

Further, the company has patterned with 31 new ecosystem companies including Uber, which Padalkar said increases the opportunities for cross-selling. 

The life insurers' embedded value has grown by 17 per cent over the last year to Rs 163.8 billion as at September 30, 2018.

HDFC Standard Life's stock price closed at Rs 359.95 on the NSE, down by 1.57 per cent from its previous closing price.