Capitaline

Results 19-Jul-22

Analysis

HDFC Life Insurance Company

Steady quarter with healthy growth and improved margins

HDFC Life Insurance Company, on consolidated basis, has posted 22% growth net profit to Rs 328.79 crore in the quarter ended June 2022. The figure includes number for recently acquired Exide life insurance Company effective from 01 January 2022. On standalone basis, the company has posted healthy 21% increase in the net profit to Rs 365.29 crore for Q1FY2023.

The company has continued to maintain healthy growth in the premium collection and exhibited improvement in new business margin to 26.8% in Q1FY2023 from 26.2% in Q1FY2022 on the back of a favourable product mix and growth in protection business.

The value of new business (VNB) increased 25% to Rs 510 crore in Q1FY2023 from Rs 408 crore in Q1FY2022. The company has posted a 31% increase in total premium collection to Rs 10050 crore, driven by a 27% rise in new business premium, while the renewal premium income also moved up 19%.

Amongst top 2 in terms of Overall new business and individual new business segment in private sector with market share at 19.0% and 14.6% respectively; Ranked number 1 within group new business segment in private sector with market share of 22.2%.

The company continues to maintain a balanced product mix with share of participating savings, non-participating savings, ULIPs, protection and annuity accounting for 30%, 35%, 25%, 5% and 6% of individual APE respectively.

The diversified distribution mix is evidenced by wide access to customers through over 300 distribution partners and 1.2 lakh+ agents end June 2022, further supplemented by 383 branches across the country.

AUM of the company increased 10% yoy to Rs 2 lakh crore (Debt: Equity mix 65:35) with around 99% of debt investments in G-Secs and AAA bonds.

The consolidated Networth stood at Rs 15498 crore end June 2022, while the solvency ratio of the company was at 178% end June 2022.

Embedded Value (IEV methodology) on standalone basis stood at Rs 29709 crore with Embedded Value per share at Rs 140.6 per share at end June 2022.

The pension subsidiary, HDFC Pension, crossed the Rs 30,000 crore AUM mark and has almost doubled its AUM in just 15 months. HDFC Pension had a market share of 38% end June 2022, maintaining its leadership position as private Pension Fund Manager (PFM) in terms of NPS AUM.

Exide Life witnessed strong growth of 34% based on Individual WRP in Q1FY2023 and continues to enjoy a healthy product mix and growth across channels.

Financial Performance FY2022:

HDFC Life Insurance Company has posted 11% decline in the net profit to Rs 1207.69 crore on standalone basis in FY2022, on the back of higher claims reserving warranted by the second wave of the pandemic. Total Premium increased 19% to Rs 45963 crore in FY2022, aided by new business growth of 20% and 18% in renewal business. Value of New Business was Rs 2675 crore, recording a robust growth of 22% over last year.

On consolidated basis, HDFC Life Insurance Company has posted net profit of Rs 1326.93 crore in FY2023.

HDFC Life Insurance Company: Results Consolidated Policyholders Account
	2206 (3)	2106 (3)	Var %	2203 (12)	2103 (12)	Var %
Premium earned (net)	9870.06	7583.20		46800.95	38194.20
Income from Investments	-3301.12	6966.54		19511.80	32683.86
Other income	59.60	21.77		192.31	183.39
Contribution from the Shareholders` account	51.66	80.52		554.44	258.56
Total Income	6680.20	14652.03		67059.50	71320.01
Commission	400.66	304.25		2007.75	1712.45
Op. expenses related to Insurance business	1560.41	955.63		5852.98	4593.33
Others	110.78	-116.21		117.58	168.21
Benefits paid (Net)	7296.84	5862.45		32616.32	22630.17
Change in valuation of policy liabilities	-2956.50	7615.50		25237.00	40842.33
Provision for taxation	20.21	-1.81		184.50	274.39
Total Expense	6432.40	14619.81		66016.13	70220.88
PAT	247.80	32.22		1043.37	1099.13
Transfer to Shareholders` account	261.35	97.88		1105.72	991.58

HDFC Life Insurance Company: Results Consolidated Shareholders Account
	2206 (3)	2106 (3)	Var %	2203 (12)	2103 (12)	Var %
Amounts transferred from Policyholders` account	261.35	97.88		1105.72	991.58
Income from investments	121.17	258.37		813.10	649.97
Others	6.06	-18.62		19.01	3.10
Total income	388.58	337.63		1937.83	1644.65
Expenses (apart from Insurance)	29.27	17.86		113.96	69.12
Contribution to policyholders account	51.66	80.52		554.44	258.56
Others	-22.71	-34.87		-33.32	-37.31
Total Expenses	58.22	63.51		635.08	290.37
PBT	330.36	274.14		1302.75	1354.28
Tax	1.57	4.59		-24.18	-6.59
PAT	328.79	269.55		1326.93	1360.87
EPS (Rs)*	6.2	5.1		6.3	6.4
* on current equity of Rs 2113.17 crore of face value of Rs 10 each
PL: Profit to Loss, LP: Loss to Profit $ Figures for 2206 (3) and 2203 (12) includes figures for Exide Life Insurance Company and are not comparable with earlier periods
Figures in crore, Source: Capitaline Corporate Database

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