MUMBAI: HDFC Life has reported a 14% on-year jump in net profit at Rs 546 crore for the June quarter on higher margins which could offset the lower than expected premium collection in terms of annual premium equivalent (APE) which came in at Rs 3,225 crore. Another big boost came in from the massive spike in investment income for policyholders which printed in Rs 1,459 crore compared to just Rs 1.8 crore in the previous quarter (Q4FY25).
Gross premium income for the quarter stood at Rs 1,487 crore of which first-year premia came in at Rs 760 crore, and Rs 472 crore from renewals of single premia, taking the total gross premium to over Rs 2,680 crore. Net premium income rose to Rs 1,446 crore.
However, individual APE grew 12.5 and the retail APE came in at Rs 2,777 crore while the key business metric value of new business (VNB) stood at Rs 809 crore, up 12.7% and new business margin improved to 25.1%.
Vibha Padalkar, the managing director, said Q1 began on a strong note, with healthy growth across topline, value of new business and steady margins. Individual APE grew by 12.5% on-year, translating into a robust two-year annualised growth of 21%.
She said the company outperformed both the overall industry and the private sector, resulting in a 70 bps increase in market share at the overall level to 12.1%, a new milestone for it.
The company’s solvency ratio stood at 192, well above the regulatory requirement of 150.
Investment income for policyholders saw a sharp spike to Rs 1,459 crore compared to just Rs 1.8 crore in the previous quarter, she said, adding the net yield on policyholder funds, particularly in unit-linked products, rebounded sharply with 9.5% returns (including unrealised gains), compared to -4.5% in the March quarter.
The 13th month persistency ratio, an indicator of policy renewal, declined to 82.7 from 87.3 on premium basis, reflecting some retention pressure. However, persistency in the 25th and 49th months improved. The conservation ratio for participating and non-par products remained steady above 85, indicating strong policyholder stickiness.
Total benefits paid stood at Rs 867.9 crore, while the change in actuarial liability was Rs 1,701 crore, both reflecting higher scale of business.
Operating expenses rose to Rs 150.9 crore, while net commissions paid were Rs 174.9 crore, indicating continued investment in distribution.
On the shareholder side, investment income came in at Rs 32 crore and profit before tax was Rs 56 crore.