Highlights:

The company has delivered a strong growth of 22% resulting in a private market share of 16.2% in terms of Individual WRP in H1FY22. On a 2 year CAGR basis, our growth was 12% compared to industry growth of 5%.

New business margin expanded by 130 bps to 26.4% for H1 FY22 from 25.1% in H1 FY21.

Value of New Business moved up 30% to Rs 1086 crore in H1FY2022. The sustained increase in VNB has been driven by growth across channels and a balanced product portfolio.

The net profit of the company has declined 26% to Rs 577 crore in H1FY2022due to higher claims reserving warranted by the second wave of the pandemic.

Persistency has improved across all cohorts driven by 18% growth in the renewable business.

All channels have recorded healthy growth. The bancassurance channel recorded healthy growth with HDFC Bank contributing meaningfully to the growth. Some of the new bank partnerships have started contributing to growth.

The company is focused on achieving sustainable new business premium growth and maintaining upward trajectory on new business margin.

The second wave of covid has largely receded. The company settled around 2 lakh claims in H1. Gross and net claims amounted to Rs 3640 crore and Rs 2466 crore respectively.

The covid claims amounted to Rs 586 crore with Rs 462 crore being individual claims and residual were group claims. Group claims take a little more time from an intimation perspective.

While individual claims tapered off, group claim intimations were high in Q2FY22 - both on expected lines. The overall experience has been well within projections.

The company has strong focus on maintaining a balanced product mix. ULIP products are witnessing strong demand on the back of strong capital market performance. The company has launched a new non-par savings product called Sanchay Plus Fixed Maturity Plan with better liquidity provisions and IRR for customer.

Annuity has seen a strong growth of 47% in H1FY22 and now forms 24% of new business premium. The group protection has seen a robust growth of 108% in H1FY2022 driven by strong credit protect as loan disbursement picks up from lenders.

With the vaccination program going well, approximately 70% of the adult population has received at least one jab, and the company is hopeful that the intensity of any subsequent covid wave will be muted.

The overall claims experience has been well within projections. Excess mortality reserve (EMR) of Rs 700 crore end June 2021 has been sufficient to cover claims received to date.

Further, the company has created an additional EMR of Rs 60 crore in Q2, taking unutilised reserves to around Rs 204 crore end September 2021. The company continues to remain watchful and are monitoring claims trends as well as adequacy of reserves at regular intervals.

The strength of balance sheet and back book surplus has enabled the company to absorb the shock of heightened claims, whilst continuing to deliver growth.

The company believes that the current environment is conducive for a robust growth of the life insurance sector as there is an increased awareness about life insurance as a financial protection tool.

The company is confident about the medium to long-term growth prospects of the protection business. The company would scale this business in calibrated manner.

HDFC Pension, the subsidiary of the company has crossed the milestone of Rs 20000 crore asset under management.

Reinsurers have indicated about possible price hike and strengthening of underwriting norms and currently negotiations are underway. However, the company has sufficient levers available to maintain margins despite any price hike. The company is retaining more risk and also reducing dependence on reinsurers

The existing suite of digital assets of the company is available across channels, partners and employees, helping the company to continue providing a seamless experience to its customers, both for servicing existing policies and buying new policies.

Digitization is the backbone of consistent performance and the company continue to invest in technology, with a view to simplify the buying journey and servicing experience for customers.

The company has seen increasing trends in online payments by customers whereby about 96% of the policies are being renewed digitally accounting for 87% of renewal premiums.

The company has received shareholder's approval for Exide Life transaction. An application has been submitted for IRDAI and CCI approval.