BENGALURU (Reuters) – India’s HDFC Life Insurance 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)
