HDFC Life Insurance Company (HDFCLIFE) Q4 13/14 earnings summary

Executive summary

• FY14 total premium collected rose 7% YoY to ₹12,063cr; Indian GAAP net profit increased 61% to ₹725cr amid subdued financial savings and the new product regime.

• Ranked third among private players in individual business, with 13.8% WRP market share; AUM reached ₹50,258cr, up 25.3% YoY.

• Priorities shifted toward profitability, business quality, customer trust and long-term investment; individual new business growth was affected by stricter sales controls and product transition.

Financial highlights

• Gross premium income was ₹12,063cr vs ₹11,323cr; net premium income was ₹11,972cr after ₹91cr net reinsurance ceded.

• Profit before tax was ₹642.5cr and profit after tax ₹725.3cr; basic and diluted EPS were ₹3.64 vs ₹2.26 in FY13.

• Operating expenses were ₹1,428cr; operating expense ratio, excluding service tax, was 10.7% vs 10.8% in FY13.

• Individual renewal and revival premium collections reached ₹8,023cr; renewal premium grew 17% YoY, supported by a 79% individual conservation ratio.

Outlook and guidance

• FY15 priorities: broaden agency, rural and digital distribution; deepen NBFC, MFI and bank ties; prepare for possible bancassurance open architecture.

• Product focus includes protection, non-participating savings, health, annuity, online plans and group term; children’s plans and digital customer outreach also targeted.

• Profitability plans emphasize better product/channel mix, longer policy terms, online and protection sales, persistency, technology-enabled productivity and cost control.

• Market recovery was expected to create growth opportunities, but competition, regulatory shifts and external constraints remained considerations.