Capitaline

Analyst Meet / AGM 20-Oct-20

Conference Call

HDFC Life Insurance Company

Expects to beat market growth and continue to gain market share

HDFC Life insurance company conducted a conference call on 19 October 2022 to discuss its financial reasons for the quarters and September 2020. Vibha Padalkar MD&CEO of the company addressed the call:
Highlights:

The focus of the company remains on long term strategy of building a sustainable and profitable business. On the back of the improved economic momentum, the company is optimistic about being able to sustain its performance across key metrics for the year.
The market share in terms of Individual WRP has increased by 235 basis points from 15.2% in H1 FY20 to 17.5% in H1 FY21. The company has wiped out Q1 de-growth and have recorded a growth of 2% during H1 FY21, on a base of 35% growth last year. The private industry de-grew by 11% on a base of 16% growth for H1 last year.
The market share for the group and overall new business segments amongst the private sector players was at 27.4% and 23.3% respectively.
The existing suite of digital assets is available across channels, partners and employees. This has enabled to continue providing a seamless experience to the end customer from a new business and servicing perspective.
More than 90% of branches are operational across the country. Measures are in place to track employee, partner and customer safety.
There is increasing trends in online payments by customers whereby about 95% of the policies are being renewed digitally accounting for 88% of renewal premium being done via digital modes.
The Company had made a provision of Rs 41 crore end March 2020, for potential adverse mortality experience due to COVID. The provision held is in excess of the IRDAI prescribed norms. While this COVID reserve was not utilized in the previous quarters, the company has continued to carry it forward on prudential basis.
The inflow into long-term savings products is showing strong growth with customers showing willingness to pick high ticket products.
The company is witnessing increase in covid related claims but that remains at the expected levels, while the other claims have declined. Total COVID claims included 418 claims in the individual business and 50 claims in the group segment.
The company has successfully raised sub debt Rs 600 crore, which has helped to raise solvency ratio by 14% to 203%.
The bancassurance and online channel has shown good growth at 11% and 14% in Q2FY2021
Within bancassurance HDFC Bank continues to perform well, while agency channel has shown pickup rising 6% in the quarter ended September 2020.
In terms of bancassurance mix, nearly 65-70% of the total bancassurance premium comes from HDFC Bank.
The company continues to add new partners, while it has added Yes Bank in the quarter ended September 2020
The credit protect has declined 36% compared with 74% in the previous quarter and its expected to return to normalcy by Q4FY2021.
The company is cautious but it is confident that it will beat industry growth and will continue to show increase in market share
The product mix consists of ULIP at 23%, non Par at 37% and Par at 33%
The company sold 4.4 lakh policies in Q2FY2021 registering a growth of 6%.
The company is witnessing healthy traction in the annuity business as there is strong structural demand for annuity and retail protection products
The pickup in growth and share of annuity and retail protection and participating products replacing ULIPs has contributed to the margin improvement.
There is recovery in the ULIP persistency closer to pre covid levels.
The company has witnessed decline in the economic variance in 1HFY21 due to the change in slope of the interest rate curve.
The company has witnessed decline in overall operating expenses, while as the growth picks up the operating expenses would rise.

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