Private insurer HDFC Life expects to grow faster than the industry even as all other insurance companies are hit by regulatory changes. HDFC Life MD & CEO Amitabh Chaudhry, in an interview with Aftab Ahmed, said

the insurance industry will continue to see a muted growth as the macro-economic environment is not expected to improve significantly in FY14. Excerpts:

What is the outlook for new premium growth in FY14?

Last year, the industry saw a degrowth of 2%, the private sector grew 2% and HDFC Life grew 15%. Nothing in the macro-political environment is driving growth and I don?t see any major positives. Secondly, the industry is going through a product transition because not only will almost all the products have to be refilled, but the level of certification that Irda is asking for means this would be a difficult year for the industry. I don?t expect the growth to come back. I expect growth to remain at 0-5% at best for the industry. If anything positive happens, I will be quite surprised. We always expect to grow faster than the industry.

Will HDFC Life profit growth consequently be muted in FY14, given the environment?

Bottomline is easier to predict. If you don?t grow enough this year, your profit could increase because it is your back book which is generating profits and the current year’s business is causing the profits to come down. We expect the last financial year trend to continue. We are expecting to make R550-600 crore in FY14, which is a decent growth over R450 crore last year.

What is your target for market share in FY14? Are you able to eat into LIC?s market share?

We have a 17.5% market share, but we don?t set market share targets. It is very difficult to do that because we don?t know what the industry is going to do. We will expand our branch presence this year in a targeted way, but it is not a very huge expansion. If you look at all the distribution channels, HDFC Bank is a big distributor for us and HDFC Bank is expanding rapidly. That presents a way to expand our distribution. Mathematically, LIC has too large a market share. If you look at individual business, I think LIC?s share had gone below 50% at one point, but now they are in 57-58% range. They have degrown in April, but their share has been quite large. For me, to gain market share I have to take a very small amount of share from LIC.

LIC?s strength is its workforce and its key strength is channel. But it is also struggling with the same challenges that the private sector face. In last 6-8 months, we have seen them de-growing little or losing market share.

What are your views on Cobrapost allegations?

The regulator has not come out with a report. So I want to be very circumspect and cautious about what I say here. Our investigations show from KYC-AML point of view, the issue is not very big. But at the same time, we cannot deny there are executives who said what they have as seen in the video. We have to be aware of that fact, we have to understand and appreciate why these statements were made in the first place. They were made at the junior most levels, but they were made. We have brought in changes, which we believe will take the game to the next level in terms of assuring that people understand what their responsibilities are and that these kind of things cannot be said. We have further strengthened our checks and balances, so that such transactions can?t go through the system.