HDFC Life Insurance eyes 15% growth in FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Vibha Padalkar, MD and CEO of HDFC Life Insurance, expects the value of new business (VNB) for the current financial year (April to March 2024-25) to grow at 15%, in tandem with the annualised premium equivalent (APE) growth.

VNB  measures the projected profitability of new policies written in a year, while APE (Annual Premium Equivalent) represents the total of annualised first-year premiums and 10% of single premiums.

Padalkar is positive about achieving a 15% growth in both total and retail APE in FY25.

In the last financial year (April to March 2023-24), the company had guided for 13-14% of APE growth.

“We have ended at 11% but we believe that 11% is rich in terms of protection, which has grown by 27%. So the quality of that growth is fairly good and we are reasonably satisfied with having reached the 11% growth,” she said.

During January 2024, while almost all life insurance companies posted strong numbers marked by increases in premium collections and APE, HDFC Life faltered, experiencing a relatively weak performance during the month.

In terms of total APE for Q4, HDFC Life recorded ₹4,727 crore, down from ₹5,162 crore in the previous year.

HDFC Life Insurance on Thursday (April 18) reported a 14.8% rise in net profit to ₹411 crore for the fourth quarter of FY24. In the same period last year, the company recorded a net profit of ₹358 crore.

Despite this growth, the company’s VNB margin dipped by over 300 basis points (bps) year-on-year (YoY) to 26.1%, slightly lower than the estimated 27.7%.

Also Read | Life insurance industry sees growth in February, largely driven by LIC

Some brokerage firms have reduced their target price for HDFC Life Insurance a day after the insurance firm reported its results for the fourth quarter of FY24.

The current market capitalisation of the company is ₹1,28,949.10 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow