HDFC Life Insurance Company Limited announces Q4, FY21 results

The Board of Directors of HDFC Life approved and adopted the audited standalone and reviewed consolidated financial results for the year ended March 31, 2021.

Key Highlights:

- 17% Individual WRP growth compared to 8% for private industry
- 26.1% New Business Margin (NBM); 14% growth in Value of New Business (VNB)
- 18.5% Embedded Value Operating Return (EVOP); EV at Rs. 26,617 crore
- PAT at Rs. 1,360 crore; Proposed Final Dividend of Rs. 2.02 per share
- Solvency at 201%

HDFC Life recorded robust growth of 17% in terms of Individual Weighted Received Premium (WRP) during FY21, on a base of 19% growth in FY20. In comparison, the private industry grew by 8% on a base of 5% growth in FY20. HDFC Life sold about 9.8 lakh new individual policies registering a YoY growth of 10%. The Value of New Business (VNB) increased by 14% to Rs. 2,185 crore on the back of consistent growth, balanced product mix and cost efficiencies, thereby translating to New Business Margin of 26.1%. HDFC Life's 13th and 25th persistency, stands at 90% and 81% respectively, up from 88% and 76% in the previous year.

Commenting on the company's performance and current situation, Ms. Vibha Padalkar, MD & CEO said, "In what has been uncertain times for humanity, we remain sensitive about the health impact and loss of lives due to the pandemic and continue to prioritise employee, customer and partner safety.

We are working closely with all our partners and re-insurers to ensure timely service and claim resolution. Over the course of the year, we have settled over 2.9 lakh death claims resulting in payouts in excess of Rs. 3,000 cr. Based on our actual experience in FY21 and after factoring in aspects such as latest mortality trends across business and customer segments and geographic spread of Covid 2.0, we have provided for a Covid reserve of Rs. 165 cr. for FY22. We will continue to review the adequacy of this reserve through the course of FY22. Despite logistical challenges through the year, we have insured close to 40 million lives in FY21. Our focus on our employees has been recognised and has helped us feature as a "Great Place to Work" amongst India's Top 30 Best Workplaces in BFSI.

Despite the challenges posed by the pandemic, we have been able to showcase resilient performance in FY21. Our market share in terms of Individual WRP has increased by 130 basis points from 14.2% in FY20 to 15.5% in FY21. We witnessed an upswing in the Savings business on a sequential basis, as more and more customers continued to evaluate investing in bundled solutions to secure both their financial needs as well as protect their loved ones. We have been able to address various customer needs through our innovative product suite, whilst maintaining a sharp focus on risk management across all lines of business.

Given the resurgence of Covid and the looming uncertainty around economic and market momentum, we will continue to maintain a cautiously optimistic stance for FY22 and evaluate our approach dynamically. We will strive for consistent new business growth and an upward trajectory on New Business Margins, whilst adhering to a conservative risk management approach. The current pandemic has led to higher awareness around the need for protection and the inadequacy of current insurance coverage. Life insurance has surely emerged as a prominent theme to protect one's family whilst securing long-term financial goals. To this effect, we take cognizance of our responsibility as an insurer and we extend our sincere gratitude to all our employees and partners, who have stood by us in these tough times and helped us achieve our objective of being one of the most trusted insurers of choice. We also thank our regulator, IRDAI for issuing several enabling notifications, without which our business might have struggled."

Other key highlights for the twelve months ending March 31, 2021:

- Private Market Share: Our ranking improved to #2 in terms of Individual WRP and our market share expanded by 130 bps from 14.2% to 15.5%. Our private market share within the group and overall new business segment stood at 27.6% and 21.5% respectively.

- Product Portfolio: We continue to maintain a balanced product mix with share of participating savings, non-participating savings, ULIPs, protection and annuity accounting for 34%, 31%, 24%, 7% and 5% of Individual APE respectively. Our focus on the retiral segment resulted in 46% growth in the Annuity business.

- Distribution Mix: Our diversified distribution comprises a wide spectrum of over 300 partners, including more than 50 new-ecosystem partners. This is supplemented by 390 branches across the country.

- Assets Under Management: As on March 31, 2021, our AUM was Rs. 1.74 lakh crore (Debt: Equity mix - 64:36); about 98% of Debt investments were in G-Secs and AAA bonds as on March 31, 2021.

Shares of HDFC Life Insurance Company Ltd was last trading in BSE at Rs.704.75 as compared to the previous close of Rs. 687.45. The total number of shares traded during the day was 231518 in over 7177 trades.

The stock hit an intraday high of Rs. 708.5 and intraday low of 687.55. The net turnover during the day was Rs. 161547208.

Source : Equity Bulls

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