India's HDFC Life Q1 profit rises 15% on higher demand for market-linked policies

HDFC Life Insurance

15/07/2024 11:52

BENGALURU, July 15 (Reuters) - India's HDFC Life
Insurance  HDFL.NS  posted a 15% rise in first-quarter profit on
healthy premium growth on Monday, helped by strong demand for
its market-linked products in a booming stock market.
    HDFC Life, the first Indian life insurer to report
June-quarter results, said profit rose 15% to 4.78 billion
rupees, while net premium income grew nearly 9%.
    India's equity market has hit multiple record highs in
recent months on strong economic growth outlook and foreign fund
inflows, and analysts say market-linked insurance plans (ULIPs)
will drive premium growth in a largely under-penetrated market.
    HDFC Life's value of new business (VNB), or expected profit
from new policies, rose 18% year-on-year to 7.18 billion rupees
($86 million) for the April-June period.
    The company's annualised premium equivalent (APE) sales, a
key metric that gives annualised total value of all single
premium and recurring premium policies, grew 23% to 28.66
billion rupees for the quarter.
    However, the rise in sales of ULIPs, which have a lower
profit margin, has resulted in the contraction of the value of
new business margins for insurers in the recent quarters. 
    ULIPs made up 38% of its overall product mix by individual
APE for the quarter, up from 25% a year earlier. 
    HDFC Life's VNB margin declined to 25% for the April-June
quarter from 26.2% a year earlier.
    Shares of the company settled 0.4% up after the results. 

($1 = 83.5450 Indian rupees)

 (Reporting by Nishit Navin in Bengluru; Editing by Sohini
Goswami)
 ((Nishit.Navin@thomsonreuters.com;))