HDFC Life Insurance Ltd posted a net profit of ₹365 crore, up 21 per cent on YoY, aided by strong premium growth and an improvement in the value of new business margins.

Total APE (Annualised Premium Equivalent) rose 22 per cent on year to ₹1,904 crore. Total premium was up 23 per cent at ₹9,396 crore, led by a 27 per cent increase in new business premium to ₹4,776 crore. “New business margin for Q1FY23 was at 26.8 per cent, up from 26.2 per cent a year ago on the back of profitable product mix and growth in protection business,” the company said.

Renewal premiums grew 19 per cent on year, which the insurer attributed to better customer persistency. HDFC Life Insurance’s 13th month persistency ratio—a measure of customer stickiness—improved to 88 per cent from 86 per cent, and the 61st month persistency improved to 54 per cent from 51 per cent in the year ago period.

‘Consistent growth trajectory’

“We continue to maintain a consistent growth trajectory, growing by 22 per cent in terms of APE in Q1 FY23. This has enabled us to maintain our market leadership as a ‘Top 3 life insurer’ across individual and group businesses,“ MD & CEO Vibha Padalkar was quoted as saying in a release.

On an APE basis, HDFC Life Insurance’s protection business grew 31 per cent on year, its credit protection business grew 96 per cent, and its annuity business grew by 39 per cent. As of Jun 30, non-par savings products comprised 35 per cent of the insurer’s product mix, followed by participating products which accounted for 30 per cent, ULIPs (unit-linked products) for 25 per cent, individual protection for 5 per cent and annuity products for 6 per cent, based on the individual APE (annualised premium equivalent).

The insurer’s solvency ratio stood at 178 per cent, with the release saying that HDFC Life will continue to evaluate raising equity capital “in order to further strengthen solvency to fuel growth.” It added that the insurer expects to complete the merger of recently acquired subsidiary Exide Life Insurance, with itself, in the second half of the financial year.