India's HDFC Life posts Q3 profit rise on insurance boost

HDFC Life Insurance

15/01/2025 12:03

BENGALURU, Jan 15 (Reuters) - India's HDFC Life
Insurance  HDFL.NS  reported a 14% rise in third-quarter profit
on Wednesday, helped by growth in the sales of retail insurance
policies.
    The company, the first major Indian life insurer to report
its quarterly results, said profit rose to 4.15 billion rupees
($48.05 million) for the three months ended Dec. 31, with net
premium income growing 10%.
    HDFC Life's claims paid during the Dec-quarter dropped 7%
year-on-year.
    Insurance penetration has historically been low in India,
but rising financial awareness and accelerated demand for cover
- especially for life and health insurance - after the COVID-19
pandemic has led to higher policy sales.
    The company's value of new business (VNB), or expected
profit from new policies - one of the key metrics for insurers -
rose 14% year-on-year to 25.86 billion rupees in the nine months
to Dec. 31.
    New Business Premiums from retail policies rose 24% in the
period, driven by a 15% rise in policies sold.
    Annualised premium equivalent (APE) sales, which gives the
annualised total value of all single-premium and
recurring-premium policies, rose 20% to 102.93 billion rupees
for the nine months.

        ULIP GROWTH
  
             
    Demand for market- or unit-linked insurance plans (ULIPs)
-has been strong, especially in the first half of the fiscal
year, driven by India's buoyant stock market.
    ULIPs, which have lower profit margins, accounted for 37% of
HDFC Life's overall product mix in terms of individual APE, up
from 32% a year ago.
    The rise in the share of ULIPs led to the VNB margin
dropping to 25.1% for the nine months ended Dec. 31 from 26.5% a
year earlier.
    However, this was higher than the 24.6% the insurer reported
at the end of September, as it pushed for sales for
higher-margined policies.

($1 = 86.3730 Indian rupees)

 (Reporting by Nishit Navin in Bengaluru; Editing by Janane
Venkatraman)
 ((Nishit.Navin@thomsonreuters.com;))