HDFC Life Q4 profit grows 12% to ₹357 cr, board recommends ₹1.70 dividend

HDFC Life Insurance Company registered a profit after tax of ₹357.52 crore for the quarter ended March 31, 2022, up 12.44% compared to ₹317.94 crore in the year-ago period.

The life insurer saw its first year premium grow to ₹2,574.87 crore during the March quarter of FY22, as opposed to ₹2,389.21 crore in the corresponding quarter of the previous fiscal. Net premium income increased to ₹14,289.66 crore from ₹12,868.01 crore during this period.

“We clocked a growth of 16% in individual WRP (weighted received premium) in FY22 with a market share of 14.8% and 9.3% in the private and overall sector respectively. We continue to deliver consistent all-round performance and be ranked amongst the top three life insurers in the industry. Despite very trying times during the 2 year pandemic, our 2 year CAGR of 17% was almost 2 times industry growth of 9%,” says Vibha Padalkar, MD and CEO of HDFC Life Insurance Company.

“Overall protection grew by 24% in terms of APE (annualised premium equivalent) and 47% in terms of new business premium. This was largely led by a 55% growth in credit life new business premium, on the back of higher disbursements. On the retirement side, our annuity business recorded 24% growth vis-à-vis industry growth of 3%. Annuities now contribute over a fifth of our new business premiums, with us almost doubling our business in the last 3 years,” she further adds.

The insurance player saw all channels perform well during the quarter under review. Bancassurance grew by 13% this year and 21% based on 2-year CAGR. Meanwhile, proprietary distribution grew by 18% this year and 11% based on 2-year CAGR, based on individual APE.

“Our agency channel grew by 26%. The channel added more than 40,000 agents in FY22, which is the second highest amongst private players. Moreover, we are focusing on building a women financial consultant model which we believe would give us higher activation, retention and productivity,” says Padalkar.

HDFC Life covered 5.4 crore customers in FY22, registering an increase of 36% over FY21, and settled close to 3.9 lakh claims during FY22. Gross and net claims for the fiscal stood at ₹5,804 crore and ₹4,328 crore respectively. As on March 31, 2022, the insurer has reserves worth ₹55 crore to carry into FY23 “as a prudent measure towards Covid”.

The embedded value of the company, as on March 31, 2022, was ₹30,048 crore, twice as much as it was 4 years ago. Operating return on EV, after factoring excess mortality reserve (EMR) created during FY22, was at 16.6% and without EMR at 19.0% as against 18.5% for FY21, the company stated.

The board of HDFC Life he Board has also recommended a final dividend of ₹1.70 per share for FY22, translating to a payout of about 30% of its profit after tax. The dividend payout is subject to shareholders’ approval at the next annual general meeting.