Private insurers HDFC Life has reported a 2.87 per cent jump in pre-tax profit to Rs 450.54 crore in Q1FY21 from Rs 437.97 crore in Q1FY20. The insurer's net profit rose 6 per cent to Rs 451 core in the same period from Rs 425 crore a year ago.

While the new business premium of the insurer declined 33 per cent year on year to 2,623 crore in Q1FY21, the renewal premium grew 24 per cent year-on-year to Rs 3,239 crore, taking the total premium earned by the insurer in Q1FY21 to Rs 5,863 crore, down 10 per cent over Rs 6,536 crore in Q1FY20.

Individual annualised premium equivalent (APE) and total APE of the insurer were down 22 per cent and 30 per cent respectively in Q1FY21. APE is the sum of annualised first-year premiums on regular premium policies, and 10 per cent of single premiums, written by the company during the fiscal year from both retail and group customers.

Value of new business, a measure of profitability for life insurers, was down 43 per cent to Rs 291 crore in Q1FY21 from Rs 509 crore. New business margin was also down 550 basis points to 24.3 per cent in Q1FY21 compared to 29.8 per cent in Q1FY20.

“Business has started to pick up on a month-on-month basis and we are seeing higher traction, especially in the individual protection business”, said Vibha Padalkar, MD & CEO, HDFC Life.

The insurer has made provision to the tune of Rs 41 crore in the June quarter for the potential adverse mortality experience due to Covid-19.

“The provision held is in excess ofthe IRDAI prescribed norms. While this Covid reserve was not utilised in the previous quarter, we believe that it is prudent for us to continue to carry it forward”, the company said. It has also assessed the investment position and made adequate impairment provision to the extent necessary. Net income from investment of the insurers in Q1FY21 stood at Rs 8,749 crore compared to Rs 2,051.38 crore in Q1FY20.

While the 61st month persistency of the insurer stood at 53 per cent, the thirteenth month persistency rose 2 basis points in Q1FY21 to 87 per cent from 85 per cent. Solvency ratio of the insurer dipped to 1.9, however it is well above the regulatory requirements.