‘We are registering robust growth in tier-2, 3 cities’

financialexpress.com:

Private sector life insurance firm HDFC Life Insurance was able to grow its number of policies sold by 10% in the first half of this fiscal, while the premium category below Rs 5 lakh grew around 17-18%, said managing director and chief executive officer Vibha Padalkar. In an interview with Mithun Dasgupta, Padalkar said that the insurer’s annualised premium equivalent (APE) should grow by mid-teens in the current financial year. Edited excerpts:

HDFC Life’s net profit grew 15% y-o-y in Q2FY24. What were the factors that contributed to this growth?

Firstly, our back book has grown by 18% because of our persistency, which has been good. Secondly, our expenses were largely under control and the investment income was in expected lines. And more importantly, our product mix, where we have more margin accretive products such as credit life business. Our retail protection business grew by 45% in the second quarter and annuity business also continued to perform well. So, all of that contributed to the growth in profit.

Net premium income soared by over 12%. What led to this growth?

It grew because of our new premium growth, and the growth in single premium. HDFC Bank is doing very well for us. Our number of policies have grown in the said period and our average ticket size continues to hold despite the new tax norm (under the new income tax rule, from April 1, 2023, income from all non-ULIP products, where aggregate insurance premium paid in a year exceeds Rs 5 lakh, became taxable). As our retail protection business grew by 45%, our sum assured posted a 65% growth.

What is the current demand scenario for the insurance industry and your company?

After April 1, when the new tax regime came into force, the market has been