ICICI Securitie's research report on HDFC Life Insurance Company
Management highlighted growth from tier-2/3 cities remains strong, witnessing 13-14% YoY growth and contributing 65% to the overall topline. On NoP basis, tier-2/3 markets contributed 75% of the business in FY24. Margin profile is similar in these cities and focus will be on selling longer-tenor products, based on mortality and persistency. HDFCLI is being very selective in tier-2/3 cities and is focusing only on top quartile of customers, based on various filters.
Outlook
HDFC Life (HDFCLI) has successfully worked its way to improve bancassurance as well as agency while focusing on SURU markets (semi-urban and rural) in FY24. This has led to 13% YoY growth in tier 2/3 locations while overall NoP has grown 11% YoY in FY24. However, high base and change in product mix (1,500bps higher ULIPs) have led to VNB declining 5% YoY in FY24. Basis strong product and distribution efforts on a base where higher ticket size segment has already halved to 6-7%, VNB growth should pick up ahead. Maintain BUY. Risks: Overall weakness in volume growth and adverse regulations.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
