The kind of the growth we have shown is after putting lid on guaranteed products. Previously, we had said we will bring our products more in terms of balanced mix.
We are calibrating to make it lot more balanced and that exactly what one sees in Q2 of this year as we have par of 33%, non-par saving at 32%, Ulips is at 21% and 12% in term and annuity put together.
With the volatility in the equity markets, policyholders are seeking assurance on their returns, and that is why participating and non-participating with a protection cover are doing well, says Vibha Padalkar, MD & CEO at HDFC Life. During a media call to discuss results of H1FY21, she said the announcement of standard term plans will give more option to the policyholders.Excerpts:
Do you think worse is behind us in terms of new business premiums for the life insurance industry?
If you look at the industry, it has seen de-growth in the first half of the year, so I think if industry ends flat, it will be on a good place. We will of course do better than the industry.
What are your views on recent announcement on standard term plan by Irdai? Will it have any impact on HDFC Life?
It is like a bouquet of offerings. Any standardisation on one end and innovation on the other end, and everything between these two ends ensures that if customers thinks of term, there is no reason why they cannot buy the product. Standardization for somebody who thinks she does not really understand all the nuances and it’s complicated or that she cannot compare the features, then we have standard products, especially with lower sum assured.
There was huge euphoria for term products at the start of the pandemic. Is the demand still there?
I think it is very much there and it is all relative because in the first quarter we grew by 50%, but if you look at growth in H1, it has been 38%. So, it is still very robust. What has happened is that those customers who were on the cusp of buying it anyway went ahead and bought it very quickly.
How has been the growth of guaranteed plans as they have seen demand from investors?
The kind of the growth we have shown is after putting lid on guaranteed products. Previously, we had said we will bring our products more in terms of balanced mix. So, in Q2 of last year, we had 51% of our non-par saving products. It is 32% now. We are calibrating to make it lot more balanced and that exactly what one sees in Q2 of this year as we have par of 33%, non-par saving at 32%, Ulips is at 21% and 12% in term and annuity put together.
What is your outlook on unit linked insurance plans (Ulips)?
It is somewhat still bearish outlook, but it can change very quickly as it is a function of equity markets. As we see equity markets doing better and some of the indices are trending better, I think Ulips will start becoming slow pull of the markets. Investors want lot of assurance on their return and that’s why par and non-par with an overall cover of protection are doing well.