- Registered a growth of 7% in total premium, 17% in renewal premium
- Sustained its position amongst the top 3 private players in individual and group business
- Recorded market share of 13.8% in individual business (private industry), 5.2% (total industry)
HDFC Life, India’s leading long term private life insurance solutions provider has registered a profit of Rs 725.3 crore in 2013-14. The company recorded 7% growth in total premium, primarily driven by 17% growth in renewal premium and 30% growth in group business. The company has introduced new processes to strengthen the quality of business which impacted growth in individual first year premium.
Key Financial and Operational Highlights:
Announcing the company’s financial results
- Total premium: Growth of 7% to Rs 12,063 crore from Rs 11,323 crore in 2012-13 largely due to healthy growth in renewal premium and group business;
- First year premium (Individual business): Introduction of stringent measures to strengthen the quality of business resulted in a deceleration in business through Bancassurance channel and we closed the year with Rs 2,356 crore which is a de-growth of 24% vs previous year;
- Renewal premium: 17% increase to Rs 8,024 crore from Rs. 6,887 crore in 2012-13. Consistent renewal growth over the years, aided by a number of customer education initiatives, reflects the quality of business underwritten by HDFC Life;
- Market share: Continue to be amongst the top 3 private players in individual and group business. Ended the year with a market share of 13.8% in Individual business (private industry) in terms of Weighted Received Premium (WRP); a rebound in Q4 with market share of 15.6%;
- Operating expenses ratio: Expense ratio maintained at 10.7% and is one of the best in the private industry. This is despite making significant investments in new distribution channels, technology and products;
- Conservation ratio: Persistent efforts in customer education, customer interaction avenues and a heightened focus on “need-based” selling helped in maintaining the conservation ratio at a healthy level of 79% (PY 79%);
- Assets Under Management: 25% growth (PY 24%) to Rs 50,258 crore as compared to Rs 40,108 crore in the previous year;
- Balanced product portfolio: Maintained a balanced product mix with ULIPs contributing 49% and Conventional business forming 51% of the APE (Annual Premium Equivalent) in the Individual business. Within the the Conventional business segment, the Company’s strategy of increasing its focus on Non Participating business worked well and it contributed to 15% of overall individual APE (PY 3% ) ;
- Diversified distribution mix: Efforts to fortify and diversify channel mix have started yielding results with channels other than bancassurance contributing 30% (PY 28%);
- Claim settlement ratio: Ranked 1st in group claim settlement ratio (99.8%) and 2nd in Individual claim settlement ratio (95.7%) amongst private players (as per the data published by IRDA for 2012-13)
, Mr. Amitabh Chaudhry, MD & CEO, HDFC Life
, said, “Our focus on ‘growth with quality’ continued in 2013-14. As a trusted name in the industry, we felt it was our responsibility to lead by example and set standards on the ‘right behavior’ to provide our customers the best value for money. We have redefined our values in more actionable terms with the onus on every employee to look at his/her decisions through the prism of our values. We have created a 360 degree framework that embeds the values in every action that we take in our company that impacts our stakeholders. We have made significant inroads as part of our large technology enabled transformation program with focus on social media, mobile, data analytics, and cloud to drive business competitiveness. I am very proud that within two years, we have established ourselves as the leading online life insurer with a strong social media presence. Going forward, apart from augmenting and nurturing our human capital, we will retain our focus on new growth engines.”
Vibha Padalkar, ED & CFO, HDFC Life
said, “We are happy to share that despite a tough macro-economic and regulatory environment, our total revenue less payouts to policyholders continued to be strong at Rs 7,310 crore (PY Rs 7,361 crore). We have shown a remarkable improvement in having achieved a post overrun new business margin of 16.1% (PY 13.2%). Our embedded value has shown a healthy growth of 19.1% to Rs 6,992 crore as on March 31, 2014 compared to Rs 5,872 crore the previous year. Moreover, we have seamlessly transitioned to the new product regime during the year and we are geared up to launch several path breaking products to meet diverse customer needs.”
Weighted received premium
– The sum of first year regular premium and 10 percent weighted single premiums and single premium top-ups
First year premium
– Regular premium received during the year for all modes of payments chosen by the customer which are still in the first year. For e.g. for a monthly mode policy sold in March 2013, the first installment would fall into first year premium for 2012-13 and the remaining 11 installments in the first year would be first year premium in 2013-14.
– Regular recurring premium received after the first policy year
– Total reported premium during the year including first year, single and renewal premium, for individual and group business
– Ratio of current year renewal premiums to previous year’s renewal premium and first year premium
APE (Annualized Premium Equivalent) –
The sum of annualized first year regular premiums and 10% weighted single premiums and single premium top-ups.
About HDFC Life
Established in 2000, HDFC Life is India’s leading long-term life insurance solutions provider offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings, Investment, and Health. The company also offers Women’s Plans to meet specific needs of women. Customers have the added advantage of customizing plans, by adding optional benefits called riders, at a nominal price. The company currently has 23 retail and 8 group products in its portfolio, along with 9 riders.
HDFC Life continues to have the widest reach with about 500 branches in India touching customers in over 900 cities and towns. The company has also established a liaison office in Dubai. The company has a strong presence in its existing markets with a strong base of Financial Consultants. HDFC Life is a joint venture between Housing Development Finance Corporation Limited (HDFC), India’s leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.
For more information, please visit our website, www.hdfclife.com.
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