Indian insurer HDFC Life's profit rises, but shrinking margins slam shares

HDFC Life Insurance

15/10/2024 11:31

BENGALURU, Oct 15 (Reuters) - India's HDFC Life
Insurance  HDFL.NS  reported a near 15% rise in second-quarter
profit on Tuesday, but a key margin declined, triggering the
worst fall in its shares in nearly a month.
    Demand for market- or unit-linked insurance plans (ULIPs)
has been strong in recent quarters, driven by India's strong
equity market.
    However, a rise in sales of ULIPs, which have a lower profit
margin, leads to the contraction of value of new business
margins for insurers.
    HDFC Life's VNB margin dropped to 24.6% for the half-year
ended Sept. 30 from 26.2% a year earlier as the share of ULIPs
in the product mix rose to 36% from 28%.
    The insurer's profit rose 14.9% to 4.33 billion rupees
($51.5 million), driven by an around 12% rise in net premium
income.
    The insurer's value of new business, which is the expected
profit from new policies, rose 17% year-on-year to 16.56 billion
rupees in the quarter.
    Annualised premium equivalent (APE) sales, a key metric that
gives annualised total value of all single premium and recurring
premium policies, rose 25% to 67.24 billion rupees for the three
months.
        The company's stock ended 3.6% lower after the results. 
  
    
     
  
($1 = 84.0350 Indian rupees)

 (Reporting by Nishit Navin; Editing by Sumana Nandy)
 ((Nishit.Navin@thomsonreuters.com;))