HDFC Life Insurance reported a 33 per cent drop in its net profit to ₹302.25 crore for the quarter ended June 30, 2021 as against ₹451.09 crore in the same period a year ago.

The drop in profit was on the back of higher claims reserving towards heightened claims intimation expected in the second and third quarter of the fiscal.

The private sector life insurer witnessed a steep rise in death claims, with peak claims in the second wave at around three to four times of the peak claim volumes in the first wave.

It paid over 70,000 claims in the first quarter. The gross and net claims provided for amounted to ₹1,598 crore and ₹956 crore respectively.

Based on its current claims experience, it has set up an additional reserve of ₹700 crore to service the claims intimations expected to be received.

HDFC Life Insurance reported a 31 per cent growth in total premium to ₹7,656 crore in the first quarter of the fiscal from ₹5,863 crore a year ago.

Total APE surged by 30 per cent to ₹1,561 crore in the first quarter of the fiscal as against ₹1,198 crore a year ago.

Vibha Padalkar, Managing Director and CEO said, “The strength of our balance sheet and back book surplus has enabled us to absorb the shock of heightened claims, whilst continuing to deliver growth.”

Its solvency ratio was 203 per cent as on June 30, 2021 from 190 per cent a year ago. Its 13th month persistency had also improved to 90 per cent at the end of the first quarter this fiscal, versus 87 per cent a year ago.