HDFC Life eyes protection growth and unit-linked moderation in FY26: CFO Niraj Shah

Niraj Shah, CFO, HDFC Life Insurance

HDFC Life plans to reduce its unit-linked insurance plan (ULIP) exposure from 39 percent to the early 30s, according to CFO Niraj Shah, following the company’s Q4 FY25 earnings announcement.

During an interaction with Moneycontrol, he said he is satisfied with the current non-par mix at 32 percent, as it aligns with the company's target range of one-fourth to one-third of its key product segments.

However, the participating product category, currently at 19 percent, is targeted to rise into the late 20s, and the ULIP segment, which is at 39 percent, is expected to be trimmed to the early 30s.

He also said he anticipates the company transitioning to a risk-based capital regime within the next 12 to 18 months, “enabling more efficient funding for growth compared to the current framework.”

Looking ahead, Shah said protection products will be the key focus for FY26, following a strong 25 percent growth in FY25.

“We expect protection to grow faster than the company’s overall growth in FY26,” he said.

He also said, HDFC Life, along with several other insurers, is actively engaging with the Insurance Regulatory and Development Authority of India (IRDAI) to address operational challenges delaying the implementation of the Bima-ASBA initiative.

Bima-ASBA (Applications Supported by Blocked Amount), an IRDAI initiative set to launch on March 1, 2025, has not yet been implemented by most insurance companies due to operational challenges, with only Bajaj Allianz Life and ICICI Lombard compliant as of now.

On the prospect of composite licensing, Shah said he sees an opportunity for HDFC Life to venture into health insurance when the Insurance Laws (Amendment) Bill is tabled.

Composite licensing, which would allow insurers to offer both life and non-life products under a single entity, is expected to be announced during the monsoon session of Parliament.

A high-level committee led by Dinesh Kumar Khara, former State Bank of India Chairman, is reviewing insurance sector recommendations.

“Outcomes can be anticipated soon,” Shah said.

HDFC Life Insurance on April 17 reported a net profit of Rs 477 crore for the fourth quarter of FY25, up by 16 percent from Rs 412 crore recorded in the year-ago period.

The net premium income of the insurer came in at Rs 23,766 crore, up 16 percent from Rs 20,488 crore in the year-ago quarter.

Its value of new business (VNB) rose by 11.5 percent year-over-year to Rs 1,376 crore in Q4, compared to Rs 1,234 crore in the year-ago period.

“We are fairly happy with the full-year growth, as it is very much in line with our growth guidance,” Shah said.