HDFC Life Insurance Company Ltd. is a joint venture between HDFC Ltd. and Standard Life Aberdeen, a global investment company. The company offers a range of individual and group insurance products such as protection, pension, savings, investment, and health. As of March 31, the company had 37 individual and 11 group products in its portfolio. The company has more than 400 branches across the country. It has a balanced product mix (UL: 23%, Par: 33%, Non-par savings: 30%, Protection: 9%, Annuity: 5%).
The company’s market share in terms of Individual WRP has expanded by 235bps to 17.5% in H1 FY21 from 15.2% in H1 FY20. The company has neutralized its Q1 de-growth and recorded a 2% growth during H1 FY21. This is on a base of 35% growth last year, which is noteworthy. Further, the performance is the best as compared with peers in the private industry, which shrank 11% on a base of 16% growth for H1 last year. The company’s market share for the group products and overall new business segments amongst private sector players stood at 27.4% and 23.3%, respectively.
The renewal premium advanced 22% y/y to Rs 75.5B in H1 FY21 as against Rs 61.8B in H1 FY20, backed by improving MoM collection. However, management is cautious about persistence trends for the next few quarters. Further, new business margin (NBM) has performed steady growth over the last three recent quarters to 25.6% in Q2 FY21 from 24.3% in Q4 FY20. In addition, its solvency position remained healthy at 203% and 190% as of September 30 and June 30, respectively. PAT witnessed a 6% y/y growth to Rs 7.8B in H1 FY21 on the backdrop of stable accretion of back book surplus and consistent focus on cost management
India remains under-insured, both in terms of penetration and density as compared with global peers. The penetration in India stood at 2.8%, while it is 16.5% and 18.3% in Taiwan and Hong Kong, respectively. This provides a huge opportunity to penetrate the under serviced segments, with the evolution of the life insurance distribution model. Further, India’s insurable population is expected to touch Rs 750M by 2020 and India’s elderly population is expected to double by 2,035 (as compared with 2015). In addition, India has the highest protection gap in the region, as growth in savings and life insurance coverage has lagged behind economic and wage growth. Protection gap growth rate is estimated to show an expansion of 4% per annum.
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