Private sector insurer HDFC Life Insurance has its plan “ready” on the composite licence, irrespective of whenever and in which from it becomes effective, MD and CEO Vibha Padalkar has said.

“If you recall, of all the committees that were formed (under Irdai), HDFC Life chaired the Development and Penetration Committee. And in the report we submitted, we did ask for a composite licence. It is no surprise that it has come through. We asked for a whole host of other things like the genesis of Bima Sugam and to have a marketplace. We also talked about being allowed to distribute other financial services products, including ones that are regulated by Irdai. So, we are happy that this is hopefully seeing the light of the day wherein the Bill gets passed and we are able to do this,” Padalkar said during an earnings conference call with analysts and investors.

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Notably, Irdai had called a meeting of the chiefs of insurance companies in March to discuss the various provisions of the Bill, among other issues.

A composite insurance registration will enable insurance companies to undertake multiple types of insurance, except reinsurance, through a single entity. The government has put out draft amendments for more reforms in the insurance sector, including a provision for composite licences. The finance ministry had in November 2022 invited comments on the proposed amendments to the Insurance Act, 1938, and Insurance Regulatory and Development Authority Act, 1999.

On how HDFC Life Insurance is thinking about offering health products – either in conjunction with HDFC Ergo or on a standalone basis – under a composite licence, Padalkar said it is not really interested in redistributing the pie as it wants to grow the pie. “We do not just really want to play in the mediclaim space, to juxtapose between life and mediclaim, there are many layers… in terms of riders, it could be in terms of embedding health solutions within a life product and so on. So, we do have a few ideas… if we are allowed to sell it.”

“In the earlier committee, we sought the permission to at least distribute health products, if we are not allowed to manufacture. Yes, that is admittedly not the best outcome. So, all these options are open, and worldwide health is much closer to life and underwriting becomes easier, understanding patients’ health conditions becomes easier and so on. So, we will wait and watch, but we certainly have our plan ready depending upon any of the avatars we are allowed,” the MD said.

Notably, during March this year, HDFC Life witnessed a whopping 83.45% year-on-year growth in its first-year premium, according to the Life Insurance Council. This strong growth in new business premiums was due to a surge in the business of non-linked insurance policies with annual premium of more than Rs 5 lakh. A huge number of pre-booking of such policies took place to escape the impact of taxation change announced in the Union Budget.

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On contribution of high-ticket policies to the overall business in percentage terms, the insurance company said for the last financial year, it was in the region of 12-14%, and was around 35% in the fourth quarter. “February had almost no impact. Most of the impact came from the second week of March, and there the delta (impact of the Budget on premium) works out to about Rs 1,000 crore,” Padalkar said.

On the Reserve Bank of India allowing HDFC Bank to own over 50% stake in the life insurance company, the MD said, “As they (HDFC Bank) are now our parents to be, that (contribution of HDFC Bank to the company’s business coming from the bancassurance channel) should start inching up. And those are the conversations that will fall in place, because if you look at, it is not just HDFC Bank, if you look at other new partnerships, we have been making significant inroads even without them being our parents. So, we have the best triangulation of product and pricing, brands and claim settlement. It’s a package.”

At the end of the fourth quarter last fiscal, HDFC held a 48.65% stake in HDFC Life.