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Irdai guidelines surprising and challenging: Vibha Padalkar, MD & CEO, HDFC Life

Also, the driving factor is our persistency ratio, which has improved by 200 basis points (bps) on a y-o-y basis and is the best in the industry.

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Since Covid claims are no longer massive, our topline has increased 22%.

With a significant decline in Covid claims, HDFC Life reported around 22% year-on-year growth in net profit. MD & CEO Vibha Padalkar tells FE’s Mithun Dasgupta that the private insurer has returned to the pre-Covid level figures in all parameters, except for protection products. Excerpts:

What are the driving factors behind the good Q1 growth?

Since Covid claims are no longer massive, our topline has increased 22%. Also, the driving factor is our persistency ratio, which has improved by 200 basis points (bps) on a y-o-y basis and is the best in the industry. Also, some of the more profitable segments like annuity have been doing very well.

What is the reason for the q-o-q decline in profit?

There is seasonality in the insurance sector. Every fourth quarter is the strongest one. So, the first quarter is for recovering and then the business slowly builds up. In terms of all parameters, we have returned to the pre-Covid level, except for protection products, which took off during the pandemic period.

How do you plan to grow your market share?

If you look at the individual weighted received premium (WRP) basis, our market share is 14.6% and it is 19% overall. Growing topline is not very difficult as in life insurance, we also need to calibrate on risk management. So, if you are going to look at overall on a slightly longer-term basis, we continue to stay ahead of the industry.

What are your plans to grow your business in the next two-three years?

We should grow in the region of 17-18%, which results in doubling every about four-and-a-half years.

What’s your take on Irdai’s growth guidelines for insurers?

I think phase-wise growth targets have been given. Right now, it is more in terms of making every attempt to grow. Whether the regulator writes to us or not, we anyway want to grow. So, our objectives are aligned. I don’t know about other companies. Our company has got suggested growth figures for the overall level. It is very surprising because to the best of my knowledge I don’t think any other regulator has done it.

Are the growth figures suggested by the regulator achievable?

It is a tall ask. On a standalone basis, the targets are always achievable. But if you want the highest levels of persistency, lowest levels of mis-sale and best levels of claims settlement ratio, it starts to become a challenge.

So, have you addressed the same to the regulator?

We will continue to talk to the regulator.

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