Q4FY21 Conference call highlights of HDFC Life Insurance Company

• FY21 and Q4FY21 Results
  • Balanced and calibrated product mix, without any product group dominating the product portfolio.  
  • Market share in terms of Individual WRP has increased 1.3% from 14.2% in FY20 to 15.5% in FY21.
  • Increased traction for protection policies in H1FY21 mainly on the back of brand comfort, claim settlement track record and onboarding experience.

Focussing on protection business, which registered a growth of 4% during the year. However, company has a cautious stance in underwriting, especially the protection products.

• • Company faced supply side challenges such as difficulty in physical assessment of medicals, lack of centralised medical database, underwriting challenges in tier 2 and tier 3 cities, etc.  
  • Encouraging growth in credit protection business to the tune of 26% YoY inQ4FY21. 
  • Improving persistency across all cohorts and company remains focussed on maintaining healthy persistency in upcoming quarters. Company retains a cautious outlook on persistency ratio of ULIP book.
  • During the year, company settled 2.9 lakh claims to the tune of Rs. 3000 crore. COVID claims in FY21 to the tune of Rs 145 crore on net basis (2324 claims).
  • COVID claims during the year were absorbed in the additional COVID reserve made by the company at the start of the year. Additional COVID reserve to the tune of Rs. 165 crore , which has led to overall COVID reserve of Rs 1300 crore , up 5% YoY.  
  • Company has healthy solvency ratio at ~200%.
  • HDFC Life achieved its target of maintaining New business margins (26.5% for FY21 as against 25.9% in FY20) in the range of FY19 and FY20 levels on the back of healthy growth across all channels, calibrated product mix and overall cost efficiency.  
  • HDFC Pension fund continues to be the largest pension fund with an AUM to the tune of Rs. 16, 380 crore registering a growth of ~98% on YoY basis. Its market share increased from 31.1% in Mar’20 to 34.4% in Mar’21.
  • Company has an optimistic outlook on pension opportunity, expecting a huge growth in long term. Medium term growth in annuity is expected to be higher than overall company growth.
• Channel performance:
  • Distribution channel comprises of over 300 partners including more than 50 new ecosystem partners and 390 branches across the country.
  • Most of the channels witnessed strong growth in FY21, with bancassurance channel registering growth to the tune of 29% YoY.
  • During the year, company added new bancassurance partners like Yes Bank, SBI Capital Markets, State Bank of Mauritius, Doha Bank and Edelweiss. Towards the end of FY21, company started gaining traction from other bancassurance partners and is confident of healthy sales in upcoming years.
  • Resurgence of growth in proprietary channel with agency channel growing 6% YoY.
  • Company is also focussing on its online channel to increase its geographical presence to non-metros. Contribution from tier 2 and tier 3 locations has increased ~50% to online sales channel.           
  • Direct business showed muted growth during the year as sales force were underground during H1FY21 , footfalls were lower , thus impacting the direct channel growth.
• FY22 Guidance:
  • Cautiously optimistic view for FY22, with the speedy vaccination programme the pent up demand is likely to come back and lift economic activities.  
  • Company is confident of expanding its market share and beating the industry growth.
  • Currently, the reinsurance rates are on lower side and it can go up in near future, as per management.  
  • Company is confident of increasing share of protection policies in India on the back of under-penetration, higher awareness, increasing affluence and increasing access to consumer credit.