HDFC Life Insurance Company rises on good Q1 numbers

HDFC Life Insurance Company gained 1.37% to Rs 625.60 after consolidated net profit rose 5.83% to Rs 450.54 crore on 11.20% growth in net premium income to Rs 5,733.73 crore in Q1 June 2020 over Q1 June 2019.

Consolidated profit before tax (PBT) gained 2.89% to Rs 450.65 crore in Q1 June 2020 as against Rs 437.97 crore in Q1 June 2019. Provision for taxation for the quarter dropped 99.10% at Rs 11 lakh as against Rs 12.26 crore in Q1 June 2019. The Q1 earnings were announced during trading hours today, 21 July 2020.

With regards to COVID-19 outbreak, HDFC Life Insurance Company's business has started to pick up on a month‐on‐month (M-o-M) basis and is witnessing a higher traction, especially in the individual protection business. As the situation begins to normalise, the insurance firm expects life insurance to emerge as an important avenue for both protection as well as long term savings, and consequently help attract a higher quantum of inflows from Indian households.

Its individual WRP market share increased by 100 basis points to 18.5% in Q1 FY21 from 17.5% in Q1 FY20. It fell 19% during Q1 FY21 on a high base of 63% growth same quarter last year and delivered better than the private industry which de‐grew by 23% on a base of 24% growth same quarter last year. In the month of June 2020, the company's de‐growth stood at 3% on a base of 87% growth in the same month last year, thereby showing improving business momentum. With regards to its future outlook, the strength of HDFC Life Insurance Company's digital assets has enabled it to minimize the impact of the pandemic on the business operations.

Total premium fell 10% to Rs 5,863 crore in Q1 FY21 over Rs 6,536 crore in Q1 FY20. Individual Annualized Premium Equivalent (APE) dropped 22% to Rs 1,072 crore in Q1 FY21 over Rs 1,378 crore in Q1 FY20. Total APE tumbled 30% to Rs 1,198 crore in Q1 FY21 over Rs 1,710 crore in Q1 FY20. Asset Under Management (AUM) jumped 8% to Rs 1,39,975 crore in Q1 FY21 over Rs 1,29,581 crore in Q1 FY20. Net worth soared 22% to Rs 7,448 crore in Q1 FY21 over Rs 6,084 crore in Q1 FY20.

Indian embedded value grew 17% to Rs 22,580 crore in Q1 FY21 over Rs 19,230 crore in Q1 FY20. Value of new business skid 43% to Rs 291 crore in Q1 FY21 over Rs 509 crore in Q1 FY20. The solvency ratio stood at 190% in Q1 FY21 over 193% in Q1 FY20.

Commenting on the Q1 result, Vibha Padalkar, the managing director (MD) and chief executive officer (CEO), has stated that: "As the economy is coming to terms with the effects of the pandemic, we are increasingly witnessing encouraging on-ground trends. Business has started to pick up on a month-on-month basis and we are seeing higher traction, especially in the individual protection business. As the situation begins to normalise, we expect life insurance to emerge as an important avenue for both protection as well as long term savings, and consequently help attract a higher quantum of inflows from Indian households."

She further added that: "We continue to exhibit resilient performance even in the current scenario. Our market share in terms of Individual WRP has increased by 100 basis points from 17.5% to 18.5%. Our calibrated approach of maintaining a balanced product mix has again enabled us to manoeuvre through a turbulent environment and adapt faster than the overall market. We remain well positioned to provide a sustainable value proposition to our customers, partners and shareholders in these challenging times."

HDFC Life Insurance Company provides various individual and group insurance solutions across India.

Source: Capitalmarket.com