Tag: HDFC Life Insurance

HDFC Life Insurance Q2 net profit down 16%

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HDFC Life Insurance registered a 15.9 per cent drop in its net profit to ₹274.16 crore in the second quarter of the fiscal as against ₹326.09 crore in the same period last fiscal.

“Our profit after tax stands at ₹577 crore for the first half of 2021-22, which is 26 per cent lower than the first half of 2020-21, on the back of higher claims reserving warranted by the second wave of the pandemic,” said Vibha Padalkar, Managing Director and CEO, HDFC Life Insurance.

Also read: How lucrative is HDFC Life’s acquisition of Exide Life

For the quarter ended September 31, 2021, net premium income increased by 13.9 per cent to ₹11,443.96 crore from ₹10,045.44 crore a year ago. The insurer settled around two lakh claims in the first half of the fiscal. Gross and net claims amounted to ₹3,640 crore and ₹2,466 crore, respectively.

“The overall experience has been in line with our projections and we carry an Excess Mortality Reserve (EMR) of ₹204 crore into the second half of 2021-22,” said Padalkar.

Its solvency ratio was at 190 per cent as on September 30, 2021 compared to 203 per cent a year ago. Its 13th month persistency was at 84.8 per cent as on September 30, 2021 versus 83.9 per cent as on September 30, 2020.

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HDFC Life expects muted third wave, says reserves should suffice for future claims, BFSI News, ET BFSI

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HDFC Life Insurance‘s reserves will be sufficient for future claims as the intensity of any subsequent COVID wave will be muted, said Vibha Padalkar, managing director and chief executive officer of HDFC Life Insurance, at the quarterly results‘ press conference.

The insurer is bullish on the impact of COVID, as the number of vaccinations have the crossed 1-billion mark. ” In addition, the recent macroeconomic data augurs well for the economy and is indicative of swifter recovery trends. Consumer sentiment remains buoyant and we are optimistic about sustained increase in business in the coming few months,” the company said in a filing.

The life insurer on Friday announced a 15.9% fall in its consolidated net profit to Rs 274.16 crore in Jul-Sep, as against Rs 326.09 crore a year ago.

Padalkar is optimistic about the second half of FY22, citing new bancassurance partnerships and agency channels. On the acquisition of Exide Life Insurance Co, Padalkar expects HDFC Life to receive the approval from the regulator by late third quarter or early fourth quarter.

Total income of the insurer in the second quarter, however, rose to Rs 20,478 crore against Rs 16,426 crore a year ago, while the net premium income increased by 52% to Rs 11,445 crore from Rs 10,056 crore, the insurer said in a regulatory filing.

“Value of new business (VNB) recorded a robust 30% growth to Rs 1,086 crore over last year. Our profit after tax stands at Rs 577 crore for H1, 26% lower than H1 FY21, on the back of higher claims reserving warranted by the second wave of the pandemic,” said Padalkar.

The insurer settled around two lakh claims in the first half of the fiscal. Gross and net claims amounted to Rs 3,640 crore and Rs 2,466 crore, respectively, against an anticipated net claims of Rs 1,690 crore, the management said in a post-earnings call. The excess Rs 776 crore was paid out of reserves, which stood at Rs 204 crore as on 30 September.

The company’s overall experience has been in line with their projections, and an Excess Mortality Reserve (EMR) of Rs 204 crore is being carried into the second half of FY22, the company said in a filing. Its solvency ratio was at 190% compared with 203% a year ago, while its 13th month persistency was at 84.8% against 83.9% around the same period last fiscal.



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HDFC Life buys Exide arm for ₹6,687 crore in cash, equity deal

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HDFC Life Insurance Company (HLIC) on Friday announced the acquisition of 100 per cent share capital of Exide Life Insurance Company for a total consideration of ₹6,687 crore.

This move comes about four years after the proposed merger of Max Life with HDFC Life was called off as it did not pass muster with the insurance regulator.

Of the total consideration, ₹725.97 crore will be payable in cash and the balance by way of issue of about 8.7 crore equity shares of HDFC life, with a face value of ₹10, issued at ₹ 685 a piece to Exide Industries Ltd (the holding company of Exide Life), HDFC Life said in a regulatory filing.

The issue of shares to Exide Industries will be on a preferential allotment basis for non-consideration. The completion of the proposed issue is subject to shareholder approval and subject to receipt of all regulatory approvals.

HDFC Life is acquiring Exide Life at about 2.47 times the latter’s embedded value (EV) of ₹2,711 crore (as at June-end 2021). EV is the value of business currently on an insurer’s books. Upon completion of the transaction, Exide Industries will hold 4.1 per cent in HDFC Life.

Vibha Padalkar, MD & CEO, HDFC Life, said the transaction will be a two-step process, with Exide Life first becoming a subsidiary of HDFC Life by December/January. Thereafter, depending on NCLT approval, which could take up to nine months, Exide Life will be merged with HDFC Life. She emphasised the subsidiarisation of Exide Life will help HDFC Life gain control of its business, making value preservation easier.

Use of Exide brand

Padalkar said that as part of the deal, HDFC Life is allowed to use the Exide brand for two years until it is transitioned out. The Assets Under Management (AUM) of HDFC Life is expected to increase by approximately 10 per cent, taking it beyond ₹2-lakh crore, she added.

Exide Life posted a turnover (total premium for FY 2020-21) of ₹3,325 crore (₹3,220 crore for FY2019-20). Its AUM as on June 30, 2021, totalled ₹18,780 crore, per the filing.

In a joint statement, the two companies said: “Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, thus providing access to a wider market. Further, a good quality, predominantly traditional and protection focussed business, will augment the existing embedded value of HDFC Life by approximately 10 per cent.”

‘Landmark transaction’

Deepak S Parekh, Chairman, HDFC Life, said, “This is a landmark transaction, first of its kind, in the Indian life insurance space. It would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base.”

The shares of HDFC Life were down 3.21 per cent to close at ₹734 a piece on Friday on the BSE. Exide Industries shares were up 6.3 per cent at close on Friday on BSE. “One of the major sticking points with investors in relation to Exide Industries was its investment in non-related life insurance business. This issue seems to be now resolved and should lead to significant re-rating of the stock,” said analysts at Investec Securities

Exide Industries had recently announced its intention to foray into lithium-ion cell manufacturing over and above its existing battery pack manufacturing plant at Gujarat in partnership with Leclanche of Switzerland. The proceeds from the sale of Exide Life should help fund the capital requirement

 

 

 

 

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Covid health claims near Rs 30,000 crore for this fiscal so far, BFSI News, ET BFSI

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Even as fears of third wave mounts, Covid related health claims in the first five months of this fiscal have crossed the claims for the entire fiscal 2021.

About 23,64,957 Covid claims were reported on a cumulative basis by August 18, of Rs 29,949.9 crore. About 19,66,595 claims worth Rs 18,325.4 crore of the claims received have been settled, according to general industry data.

On a year-to-date (YTD) basis (April-July), insurers saw their premiums rise 15.49 per cent to Rs 64,607.25 crore, against Rs 55,939.85 crore in the year-ago period.

While Covid-related claims have come down recently, claims for routine surgeries and hospitalisation are rising.

Rising premiums

With rise in claims, premiums are also on the upswing.

Health insurance premiums have been main driver of non-life insurance industry since the commencement of Covid-19 pandemic as firms have recorded 19.46-per cent year-on-year (YoY) growth in premiums in July.

In July, about 33 non-life insurers garnered premiums of Rs 20,171.15 crore, against Rs 16,885 crore in the same month last year.

The health segment recorded 34.2 per cent growth during April-July this year, which is much higher than 9.9% a year ago, when there were country-wide restrictions.

A number of insurers are also looking at raising prices for health products to bridge the losses.

The YTD premium growth of standalone health insurers continued to be higher than industry average in YTD FY22, indicating that retail premiums are growing faster than group business as standalone health insurers derive most of their premiums from retail segment.

The government schemes have also been a significant factor in the growth as these premiums reached Rs 2,906 crore for the YTD July FY22 versus premiums of Rs 806 crore for a similar period last year.

Growth and losses

While general insurers grew 12.9 per cent on a year on year basis between April and July, standalone health insurers reported a 46.1 per cent growth in premium in the same period on an annual basis.
Of the three listed private life insurers-SBI Life Insurance and HDFC Life Insurance reported lower profits for the April-June quarter while ICICI Prudential Life Insurance reported a loss on account of rise in Covid claims.



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Standard Life to sell 7 crore shares of HDFC Life Insurance via block deals

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Standard Life is looking to sell seven crore shares, or 3.46 per cent, in HDFC Life Insurance. This will be through block deals on June 29. The price range has been fixed at ₹658-678 a share. At the lower end of the price range, the base offer size would amount to ₹4,606 crore. JP Morgan India and BoFA Securities India are the joint book runners. As on March 31, 2021, Standard Life held 17.95 crore shares amounting to 8.88 per cent in HDFC Life Insurance. HDFC Life stock closed at ₹696 a piece on the BSE on Monday.

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HDFC Life Insurance Q4 net profit up 2%

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Private sector HDFC Life Insurance reported a 2 per cent increase in standalone net profit in the quarter ended March 31, 2021, at ₹317.94 crore.

Its net profit was ₹311.71 crore in the same period in 2019-20. For 2020-21, its net profit increased by five per cent to ₹1,360.1 crore against ₹1,295.27 crore in 2019-20.

Premium income

The insurer’s net premium income grew by a robust 23 per cent to ₹12,868.01 crore for the fourth quarter of 2020-21 versus ₹10,464 crore a year ago.

“HDFC Life sold about 9.8 lakh new individual policies, registering a year-on-year growth of 10 per cent. The value of new business increased by 14 per cent to ₹2,185 crore on the back of consistent growth, balanced product mix and cost efficiencies, thereby translating to new business margin of 26.1 per cent,” it said in a statement on Monday.

Its solvency ratio was at 201 per cent as on March 31, 2021, versus 184 per cent a year ago. The 13th month persistency ratio was 90 per cent compared to 88 per cent a year ago.

Vibha Padalkar, Managing Director and CEO, HDFC Life, said the insurer has provided for a Covid reserve of ₹165 crore for 2021-22. “We will continue to review the adequacy of this reserve through the course of the fiscal year,” she said, adding that over the course of the year it settled over 2.9 lakh death claims, resulting in payouts in excess of ₹3,000 crore.

The board also recommended a final dividend of ₹2.02 per equity share of face value ₹10 each for 2020-21, subject to approval of members at the Annual General Meeting.

Based on the recommendation of the Nomination and Remuneration Committee, the board also approved the re-appointment of Vibha Padalkar as MD and CEO of the company for five years with effect from September 12, subject to approval of the members at the AGM and IRDAI.

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IDFC First Bank raises Rs 3,000 cr equity capital through QIP, BFSI News, ET BFSI

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NEW DELHI: IDFC First Bank has raised Rs 3,000 crore through QIP in which global marquee investors like BNP Paribas and Baillie Gifford participated alongside domestic players such as Bajaj Allianz Life and HDFC Life.

The qualified institutional placement (QIP) closed on Tuesday and the lender issued 52.31 crore fresh equity shares at Rs 57.35 per share.

“On April 6, 2021, the bank has raised Rs 3,000 crore through Qualified Institutional Placement to marquee international and domestic investors by issuing 52.31 crore fresh equity shares having face value of Rs 10 each, at a price of Rs 57.35 per share,” IDFC First Bank said in a regulatory filing on Wednesday.

Out of this, 68.33 per cent of the allotment was made to foreign investors and 31.67 per cent to domestic investors.

Pursuant to the allotment of equity shares in the issue, the paid-up equity share capital of the bank stands increased from Rs 5,675.85 crore to Rs 6,198.95 crore, it said.

As many as eight investors subscribed to more than 5 per cent of the shares offered in the QIP.

These are: Bajaj Allianz Life Insurance 11.98 per cent, Baillie Gifford Emerging Markets Equities Fund 11.39 per cent, Baillie Gifford Pacific Fund (a sub fund of Baillie Gifford Overseas Growth Fund) 8.95 per cent, and BNP Paribas Arbitrage-ODI received 8.62 per cent of the shares in the issue.

City of New York Group Trust was allotted 8.53 per cent shares under the QIP, Baillie Gifford Emerging Markets Growth Fund 6.79 per cent, HDFC Life Insurance 6.67 per cent and Tata AIA Life Insurance 5.83 per cent.

The private sector bank also released some provisional data, witnessing over 10 per cent yearly growth in its total funded assets at Rs 1,17,803 crore as of March 31, 2021 from Rs 1,07,004 crore a year ago.

Total consumer deposits grew by 43.15 per cent year-on-year to Rs 82,628 crore from Rs 57,719 crore for the period.

Bank’s CASA deposits (current account and savings account) jumped by 122.74 per cent to Rs 46,022 crore from Rs 20,661 crore by March 2020. The CASA ratio stood at 51.95 per cent by end of March 2021, up from 31.87 per cent by year ago same period.

However, the top 20 depositors’ concentration witnessed a decline at 7.76 per cent against 20.26 per cent.

IDFC First Bank said these figures are being released under Sebi norms on disclosure requirements. The figures mentioned as on March 31, 2021 are provisional and subject to audit undertaken by the statutory auditors of the bank, it added.



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