No change in overall average ticket size: HDFC Life Insurance CFO Niraj Shah
Although the volume of policies with over Rs 5 lakh premium got impacted in the first quarter this fiscal due to the new tax rule, for HDFC Life Insurance overall average ticket size did not change, says its executive director & chief financial officer Niraj Shah. In an interview with Mithun Dasgupta, Shah says the insurance company is in the process of launching products to address very high ticket sizes also. Excerpts:
Q1) What were the factors that contributed to the growth in the first quarter this fiscal for HDFC Life Insurance?
A: There were a lot of concerns as we know that the first quarter is likely to register a very large de-growth for the sector. We were always reasonably confident. We don’t believe that too much discontinuity will happen. There could be a slow start to the year. That is okay. But things will pick up as we go forward. And that is exactly what has happened. We have grown higher than the sector. From our perspective we were very clear that we wanted to guide both volume growth and not have any significant impact on the ticket size. And that is exactly what has happened. Our average ticket size (ATS), contrary to what the expectation may have been, has actually increased by 3%. The savings ticket size is largely where it was, unit-linked ticket size has gone up and annuity ticket size has gone up as well.
Q2) What kind of impact did the company witness on policies with over Rs 5 lakh annual premium in the first quarter as incomes from such policies become taxable?
A: Definitely the volume of policies above Rs 5 lakh has got impacted as expected. But that is something which is more than made up by the growth in the lesser than Rs 5 lakh policies segments. So all the segments like less than Rs
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