HDFC Life Q2 results: ​Equity exposure, market share gain among key takeaways

HDFC Life, which replaced Vedanta in the Nifty 50 index, witnessed nearly 5 per cent year-on-year (YoY) growth in gross premium income during the September quarter. The solvency ratio of the company also improved to 203 per cent from 192 per cent YoY as sub-debt of Rs 600 crore has helped strengthen the ratio. Overall, the bottom line of the company has increased by nearly 6 per cent YoY to Rs 326.09 crore.

Key takeaways from HDFC Life Q2 results

• Market share gain

HDFC Life’s market share, in terms of individual weighted received premium (WRP), has increased by 235 basis points to 17.50 per cent in April-September against 15.2 per cent in the same period last year. “We have neutralised the Q1 de-growth and have recorded a growth of 2 per cent during H1 FY21. This is on a base of 35 per cent growth last year. This compares well against the private industry, which de-grew by 11 per cent on a base of 16 per cent growth for H1 last year. Our market share for the group and overall new business segments amongst the private sector players was at 27.4 per cent and 23.3 per cent respectively,” HDFC Life said.

WRP is the sum of the first-year premium received during the year and 10 per cent of single premiums including top-up premiums.

• Assets under management

With a mix of debt and equity, the company witnessed a growth of 18 per cent YoY in assets under management (AUM). HDFC Life increased its exposure to equity to 33 per cent as of September 30 from 29 per cent as of March 31. The company had over 97 per cent of debt investments in government bonds and AAA rated securities as on Sep 30.

“As on September 30, our AUM was Rs 1.5 lakh crore with debt:equity mix at 67:33,” HDFC Life said.

• Sector outlook

HDFC Life sees a huge opportunity in the underpenetrated life insurance business. It believes that India’s insurable population is expected to touch 750 million by 2020. “Emergence of nuclear families and advancement in healthcare facilities lead to an increase in life expectancy thus facilitating need for pension and protection based products,” it said.

• What did the CEO say?

Vibha Padalkar, MD & CEO, HDFC Life, said that the company’s focus remains on its long-term strategy of building a sustainable and profitable business and adding value to all key stakeholders. “On the back of the improved economic momentum, we are optimistic about being able to sustain our performance across key metrics for the year,” said Padalkar.