HDFC Life Q1 net profit rises 6 percent to Rs 451 crore

HDFC Life’s net profit rose 6% to Rs 451 crore in the June quarter of current financial year. While new business premium and total annualised premium equivalent (APE) came down in the first quarter, renewal premiums saw surge in first quarter of current fiscal.

New business premium, which includes individuals and groups, stood at Rs 2,623 crore in Q1FY21 as compared to Rs 3,926 crore in Q1FY20, a fall of 33%. While total APE was at Rs 1,198 crore in the first quarter of this financial year compared to Rs 1,710 crore in previous financial year a dip by 30%. Vibha Padalkar, MD & CEO, said, “As the economy is coming to terms with the effects of the pandemic, we are increasingly witnessing encouraging on-ground trends. Business has started to pick up on a month-on-month basis and we are seeing higher traction, especially in the individual protection business.”

HDFC Life saw protection based on individual APE at Rs 113 crore in Q1FY21 compared to Rs 75 crore in Q1 FY20 a rise of 50%. APE is the sum of annualised first year regular premiums and 10% weighted single premiums and single premium top-ups. “Our market share in terms of Individual weighted received premium (WRP) has increased by 100 basis points from 17.5% to 18.5%. Our calibrated approach of maintaining a balanced product mix has again enabled us to manoeuvre through a turbulent environment and adapt faster than the overall market,” added Padalkar.

HDFC Life has also carried the unutilised provision of Rs 41 crore made at March 31, 2020, for potential adverse mortality experience due to the novel Coronavirus.

The company has received 41 individual claims to date for Covid-19, off which valid claims are 39 and the value of sum at risk is less than Rs 2 crore. “So as of now we don’t require Rs 41 crore that we had setup as a reserve. But as a being conservative we thought to carry it until we have more clarity on the pandemic,” said Padalkar.

The Assets Under Management as on June 30, 2020 was Rs 1.4 lakh crore (Debt:Equity mix – 68:32); about 97% of debt investments were in G-Secs and AAA bonds as on June 30, 2020. The stock of HDFC Life on Tuesday ended the day at Rs 627, up by Rs 9.85 or 1.60% on BSE.