New business margins rose to 29.8 percent in Q1FY20 compared to 24.2 percent a year ago
HDFC Life Insurance posted an 11.7 percent year-on-year (YoY) growth for the first quarter ended June, with standalone net profit at Rs 424.62 crore, driven by growth in new business premiums.
New business margins rose to 29.8 percent in Q1FY20, compared to 24.2 percent a year ago. The 13th-month persistency rose to 88.8 percent in Q1FY20 from 85 percent in the year-ago period.
The individual annualised premium equivalent (APE) rose by 64 percent YoY to Rs 1,378 crore in Q1. The new business premium rose by 47 percent YoY to Rs 3,926 crore in the June quarter.
APE refers to the sum of the annualised first-year regular premiums and 10 percent weighted single premiums and single premium top-ups.
Change in product mix
There was a stark change in HDFC Life's product mix in the June quarter. Unit-linked products mix dropped to 26 percent of individual APE in Q1 compared to 54 percent a year ago. On the other hand, the share of non-par savings rose to 63 percent in Q1FY20 from 11 percent in Q1FY19.
Non-par savings are traditional products that do not include bonuses.
Vibha Padalkar, MD & CEO said, "We have recorded stellar top-line growth, with strong traction witnessed across savings, protection and retirement solutions whilst maintaining our focus on profitability. Our diversified distribution mix coupled with product innovation has helped us address niche customer segments and emerging profit pools."
Padalkar added that the company has stepped up efforts within the protection and retirement space, which she expects would fuel growth across market cycles.
The private life insurer's assets under management stood at Rs 1.3 lakh crore and a debt-equity mix of 62-38 as on June 30. For the same period, almost 96 percent of debt investments are in government securities (G-Sec) and AAA bonds.HDFC Life's operating return on embedded value (EV) stood at 19.9 percent in Q1 compared to 18.4 percent a year ago. Operating Return on EV is the ratio of EVOP (Embedded Value Operating Profit) for any given period to the EV at the beginning of that period.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.