HDFC Life Insurance Financials
| Parameters Rs bn | Q1 FY21 | Q1 FY20 | % Change | FY20 | FY19 | % Change1 |
|---|---|---|---|---|---|---|
| Total Premium | 58.6 | 65.4 | -10.40% | 327.1 | 291.9 | 12.06% |
| Profit after Tax | 4.5 | 4.2 | 7.14% | 13 | 12.8 | 1.56% |
| Assets Under Management | 1,399.70 | 1,295.80 | 8.02% | 1,272.30 | 1,255.50 | 1.34% |
| Indian Embedded Value | 225.8 | 192.3 | 17.42% | 206.5 | 183 | 12.84% |
| Net Worth | 74.5 | 60.8 | 22.53% | 69.9 | 56.6 | 23.50% |
| Solvency Ratio | 190% | 193% | -3.00% | 184% | 188% | -4.00% |
| Shareholder Surplus | 3.5 | 3.5 | 0.00% | 10.9 | 9 | 21.11% |
| Policyholder Surplus | 1 | 0.7 | 42.86% | 2.1 | 3.8 | -44.74% |
| Income from Investments | -87.5 | 20.5 | -526.83% | -33.1 | 90.3 | -136.66% |
HDFC Life Insurance Co Ltd-
HDFC Life Insurance (HLI) is a joint venture between HDFC Ltd and Standard Life Aberdeen, a global investment company. HDFC Pension Management Co and HDFC International Life & Re are wholly-owned subsidiaries.
HDFC Life is a life insurance solutions provider in India, operating in protection, pension, savings, health solutions, investment, and annuity. As on FY20, the Company had 37 individual and 11 group products in its portfolio and six-rider benefits. HDFC Life has diversified distribution facilities across the country. The Company has 421 branches, touch-points through partnerships with over 230 banks, NBFCs, SFBs, MFIs and more than 40 new ecosystem partners as digital channels. Financial consultants are also part of the distribution strategy.
As on Q1FY21, the promoters HDFC Ltd. and Standard Life (Mauritius Holdings) held 50.14% and 10.27% respectively in HDFC Life and remaining is public.
ICRA has long term rating of ICRA AAA (Stable) and Subordinated debt rating of ICRA AAA (Stable).
Credit Positives
- Strong Parentage Support from HDFC Group
- Balanced Diversification of Products
- Dependency on Unit Linked Products reducing
Credit Negatives
- Maintaining robust profitability
- Volatility in investment income
Strong Parentage Support and Capitalization Profile
HDFC Life is benefitted in business and capitalization profiles due to a strong promotor brand. The company has a comfortable capitalization profile with its solvency ratio at 190% in Q1FY21 against 184% in FY20 with a regulatory requirement of 150%.
In July 2020 company issued subordinated debt of Rs. 6 billion which will improve the solvency position by 15% and to support the shift in the companys product strategy to protection products that require higher capital compared to savings products.
Financial Indicators
Total premium declined 10% to Rs 58.6 billion in Q1FY21, New Business Premium degrew 33% while Renewal Premium rose 24%. Profit after tax rose 6% to Rs 4.5 billion y-o-y in Q1FY21. Assets Under Management rose 8% to Rs 1399 billion, Indian Embedded Value higher by 17% to Rs 225.8 billion, return on equity declined 390 bps to 25% in a year. Income from Investments was loss of Rs 87.5 billion against a gain of Rs 20.5 billion in previous years.
Product constituents are is Unit Linked 27%, Par 30%, Non-par savings 28%, Protection 11% and Annuity 5%.Unit link AUM is 44% while traditional products at 56% and 68% in debt instruments and 32% in equity as on FY21. Persistency ratio for 13 months improved to 875 and for 61 months it was at 53%.
Total New Business market share is at 20.75 for the company. Value of New Business is at Rs 2.9 billion while New Business Margin was at 24.3% as on Q1FY21.
Liability Profile
The company has subordinate debt outstanding at Rs 6 billion while policy liabilities at Rs 684.2 billion as on Q1FY21.