HDFC Life Q3 Review - Slower New Business Premium; Core Strength To Drive Growth, Valuation: ICICI Direct
Total APE (post-merger) registered healthy growth of 21.8% YoY at Rs 8174 crore for 9MFY23.
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ICICI Direct Report
Exide Life merger was completed on October 14, 2022 and numbers have been restated. Hence, YoY and QoQ numbers are not comparable.
On a post-merger basis, HDFC Life Insurance Company Ltd.'s new business premium grew at a slower pace at 9.6% YoY at Rs 18713 crore in nine months-FY23 and new business margin were at 26.5% in 9MFY23 versus 26.2% in H1 FY23. Individual WRP market share declined 30 basis points YoY to 15.8%.
Total APE (post-merger) registered healthy growth of 21.8% YoY at Rs 8174 crore for 9MFY23.
Non-par saving products now form 39% versus 37% in H1 FY23 and 33% in 9MFY22. Annuity business contributes 6% while protection business contributes 4% of premium in 9MFY23.
HDFC Life's opex ratio increased ~250 bps YoY from 12.2% to 14.7%, led by merger. However, on a merged basis, opex ratio has remained steady at 14.7% sequentially.
Assets under management was at Rs 233839 crore, up 20.1% YoY. Debt to equity mix in AUM was at 68:32 with ~99% of debt investments in G-secs and AAA bonds. On a merged basis, AUM has increased 4% QoQ.
Persistency ratio remains steady with 13th month persistency at 87% and 61st month persistency at 52%.
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