Beating market expectations, private sector life insurer HDFC Life Insurance on Tuesday reported a 12.45% year-on-year rise in its standalone net profit to Rs 357.52 crore in the fourth quarter of the last fiscal year from Rs 317.94 crore for the same period of the previous financial year.
The life insurer’s net profit for the March quarter witnessed 30.65% quarter-on-quarter growth from Rs 273.65 crore for the December quarter of FY22, according to a stock exchange filing. During the period under review, first-year premium grew 7.78% y-o-y to Rs 2,574.87 crore from Rs 2,389.21 crore for the corresponding period of FY21, while renewal premium saw a 15.6% y-o-y rise to Rs 7,341.17 crore from Rs 6,350.40 crore. And, single premium rose 8% YoY to Rs 4,505.22 crore against Rs 4,170.58 crore for the corresponding period of FY21.
The company’s net profit for the last fiscal year, however, declined 11.2% YoY to Rs 1207.69 crore compared to Rs 1360.10 crore for the previous year due to higher mortality reserve created during the year. Its net premium income during FY22 saw a 19.08% y-o-y increase to Rs 45,396.46 crore against Rs 38,122.30 crore in FY21.
Commenting on the FY22 performance, Vibha Padalkar, MD & CEO, said the company clocked 16% growth in individual weighted received premium (WRP) with a market share of 14.8% and 9.3% in the private and overall sectors, respectively. “We continue to deliver consistent all-round performance and be ranked amongst the top three life insurers in the industry. Despite very trying times during the 2-year pandemic, our two-year CAGR of 17% was almost two times industry growth of 9%,” Padalkar said, adding, during the period overall protection grew 24% in terms of annual premium equivalent (APE) and 47% in terms of new business premium.
“This was largely led by 55% growth in credit life new business premium, on the back of higher disbursements. On the retirement side, our annuity business recorded 24% growth vis-à-vis industry growth of 3%. Annuities now contribute over a fifth of our new business premiums, with us almost doubling our business in the last 3 years,” she said.
New business margin for FY22 was 27.4%, versus 26.1% for FY21. On overall market share for the year ended March 31, 2022, the insurance company said it was among top two in terms of overall new business and individual new business segments in private sector with market share at 21.0% and 14.8%, respectively. And, it ranked No. 1 within group new business segment in private sector with market share of 27.9%.
According to Padalkar, HDFC Life Insurance settled close to 3.9 lakh claims during FY22. “Gross and net claims were at Rs 5,804 crore and Rs 4,328 crore, respectively, for FY22. As on 31st March 2022, we carry reserves of Rs 55 crore into FY23 as a prudent measure towards Covid,” she added.
Solvency as on March 31, 2022, stood at 176%, post the cash payout of Rs 726 crore to Exide Industries, as part-consideration for the acquisition of Exide Life. Solvency ratio was 201% at the end of financial year 2020-21.
The company’s subsidiary, Exide Life, recorded 22% growth based on individual WRP in FY22. Its embedded value as on March 31, 2022, was Rs 2,910 crore. “The merger process has been initiated with NCLT and is expected to be completed in the second half of this financial year. Our endeavour is to be able to remain margin neutral at the merged company-level by the end of FY23 and resume margin expansion thereafter,” the company added.
On Tuesday, HDFC Life’s scrip rose 1.71% to end the day at Rs 549.50 on the BSE.