Private life insurer HDFC Life Insurance posted a 5 percent year-on-year (YoY) increase in its December quarter (Q3) net profit at Rs 263.44 crore on improvement in investment income and premium collection.
A Reuters estimate had pegged the net profit of HDFC Life at Rs 370.2 crore for the third quarter of FY21.
The net premium income stood at Rs 9,488.84 crore in Q3 as against Rs 7854.98 crore in the year-ago period.
Vibha Padalkar, Managing Director and Chief Executive Officer, HDFC Life Insurance, said, "We are witnessing a lift in customer confidence, which is also reflected in the new business premium trends for both the individual as well as the group credit protect business. We continue to see a pickup in the savings business, accompanied by an increase in both the average ticket size as well as number of policies."
For nine months ended December 31 (9MFY21), the new business margin stood at 25.6 percent as against 26.6 percent a year ago.
The total annualised premium equivalent (APE) for 9MFY21 was at Rs 5,491 crore which was a 4 percent YoY increase over the year-ago period.
Individual business APE stood at Rs 4,661 crore for the nine months, showing a 6 percent YoY growth.
Here, protection APE stood at Rs 345 crore, showing a YoY increase of 17 percent.
As on December 31, the assets under management stood at Rs 1.7 lakh crore. Here, 64 percent was debt and 36 percent was equity. Further, about 98 percent of debt investments were in G-Secs and AAA bonds.
In the post earnings call, Padalkar said that renewal premium saw a 22 percent growth in 9MFY21 to Rs 12,126 crore.
When it comes to cost optimisation amidst Coronavirus outbreak, she said that the company's total branches have come down to 391 from 412 in the beginning of the year.
"These were either small branches, present in similar locations to other branches or those with low footfalls. But going forward, we may not reduce branches significantly and would prefer to shrink the size of these branches," she added.
Coronavirus claims
Padalkar explained that HDFC Life settled 1,271 individual and 542 group claims related to Coronavirus deaths. The Coronavirus-related claim amount is approximately Rs 90 crore.
"The overall claims Coronavirus claims experience is within our expectation. But we are monitoring the situation closely. There was a spike in Coronavirus death claims seen in the end of Q2 and beginning of Q3. But from December, it is easing," she added.
The company had set aside Rs 41 crore as COVID-19 reserves at the end of March 2020 and hasn't dipped into this amount yet.
The Coronavirus claims had touched 21 percent of the total claims for the company during its peak but has now come down to 16 percent, explained Padalkar.