Hdfc Life Insurance Co. Ltd. · NSE:HDFCLIFE
Hdfc Life Insurance — H1 FY21 Earnings Presentation
91 slides from Hdfc Life Insurance's earnings presentation, Oct 19, 2020
Slide 1: Outcome of Board Meeting cover letter
October 19, 2020 Ref. No.: HDFC Life/CA/2020‐21/41 Listing Department Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No C/1, Block G, Sir PJ Towers, Bandra‐Kurla Complex, Dalal Street, Bandra (East), Fort, Mumbai‐ 400 051 Mumbai – 400 001 NSE Symbol: HDF
Slide 2: Auditor's Report on Standalone Financial Results
Price Waterhouse Chartered Accountants LLP G. M. Kapadia & Co. Chartered Accountants Chartered Accountants 252, Veer Savarkar Marg, 1007, Raheja Chambers, Opp Shivaji Park, 213 Nariman Point, Dadar (W), Mumbai 400028 Mumbai – 400021 Auditor’s Report on Standalone Financial Results for the quarter an
Slide 3: Auditor's Report (continued)
examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion. 5. In our opinion and to th
Slide 4: Statement of Standalone Audited Results
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Standalone Audited Results for the Quarter and Six Months ended September 30, 2020 (₹ in Lakhs) Three Months ended / Six Months ended / Year ended / As at As at As at Sr. Particulars September 30
Slide 5: Standalone Balance Sheet
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Standalone Balance Sheet as at September 30, 2020 (₹ in Lakhs) As at Particulars September 30, September 30, March 31, 2020 2019 2020 ( Audited) ( Audited) ( Audited) SOURCES OF FUNDS SHAREHOLDERS' FUNDS: Sha
Slide 6: Standalone Receipts and Payments Account
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Standalone Receipts and Payments Account for the six months ended September 30, 2020 (₹ in Lakhs) Six months ended Sr. September 30, September 30, March 31, Particulars No. 2020 2019 2020 ( Audited) ( Audited
Slide 7: Standalone Analytical Ratios
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Standalone Audited Results for the Quarter and Six Months ended September 30, 2020 (₹ in Lakhs) Three Months ended / Six Months ended / Year ended / As at As at As at Particulars September 30, Ju
Slide 8: Standalone Analytical Ratios (continued)
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Standalone Audited Results for the Quarter and Six Months ended September 30, 2020 (₹ in Lakhs) Three Months ended / Six Months ended / Year ended / As at As at As at Particulars September 30, Ju
Slide 9: Segment Reporting (Standalone)
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Segment Reporting (Standalone) for the Quarter and Six Months ended September 30, 2020 (₹ in Lakhs) Three Months ended Six Months ended Year ended Sr. September 30, June 30, September 30, September 30, Septem
Slide 10: Segment Reporting (Standalone) continued
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Segment Reporting (Standalone) for the Quarter and Six Months ended September 30, 2020 (₹ in Lakhs) Three Months ended / Six Months ended / Year ended / As at As at As at Sr Particulars September 30, June 30,
Slide 11: Half yearly disclosures Regulation 52(4)
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Standalone half yearly disclosures as per Regulation 52(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (₹ in Lakhs) Six months ended / As at Year ended / As at Par
Slide 12: Other disclosures: Shareholder Complaints
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Other disclosures : Status of Shareholders Complaints as on September 30, 2020 Number of Sr No. Particulars Complaints 1 Investor complaints pending at the begining of the quarter 1 2 Investor complaints rece
Slide 13: Other disclosures: Investor Complaints
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Other disclosures : Status of Investor Complaints for the quarter ended September 30, 2020 Number of Sr No. Particulars Complaints 1 Investor complaints pending at the begining of the quarter NIL 2 Investor c
Slide 14: Notes to Standalone Results
Notes: 1. The standalone results of the company for the quarter and six months ended September 30, 2020 were reviewed by the Audit Committee and subsequently approved by the Board of Directors at its meeting held on October 19, 2020. 2. The standalone financial results have been prepared in accordan
Slide 15: Limited Review Report on Consolidated Results
Price Waterhouse Chartered Accountants LLP G. M. Kapadia & Co. Chartered Accountants Chartered Accountants 252, Veer Savarkar Marg, 1007, Raheja Chambers, Opp Shivaji Park, 213 Nariman Point, Dadar (W), Mumbai 400028 Mumbai – 400021 To The Board of Directors HDFC Life Insurance Company Limited (form
Slide 16: Limited Review Report (continued)
5. Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement has not been prepared in all material respects in accordance with the recognition and measurement principles laid down
Slide 17: Statement of Consolidated Unaudited Results
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Consolidated Unaudited Results for the Quarter and Six months ended September 30, 2020 (₹ in Lakhs) Three Months ended / As at Six months ended/As at Year ended/As at Sr. September 30, 2020 June
Slide 18: Consolidated Balance Sheet
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Consolidated Balance Sheet as at September 30, 2020 (₹ in Lakhs) As at September 30,2020 September 30,2019 March 31,2020 Particulars (Unaudited) ( Unaudited) ( Audited) SOURCES OF FUNDS SHAREHOLDERS' FUNDS: S
Slide 19: Consolidated Receipts and Payments Account
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Consolidated Receipts and Payments Account for the six months ended September 30, 2020 (₹ in Lakhs) Six months ended/As at Year ended/As at Sr. September 30,2020 September 30,2019 March 31,2020 Particulars No
Slide 20: Consolidated Analytical Ratios
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Statement of Consolidated Analytical Ratios for the Quarter and Six months ended September 30, 2020 (₹ in Lakhs) Three Months ended / As at Six months ended/As at Year ended/As at September 30, 2020 June 30,2
Slide 21: Consolidated Analytical Ratios (continued)
Three Months ended / As at Six months ended/As at Year ended/As at September 30, 2020 June 30,2020 September 30, 2019 September 30, 2020 September 30, 2019 March 31,2020 Particulars (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (ix) Persistency Ratio 13th month 90.8% 87.0% 89
Slide 22: Consolidated Segment Reporting
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Consolidated Segment Reporting for the Quarter and Six months ended September 30, 2020 (₹ in Lakhs) Three Months ended / As at Year ended / As at Year ended Sr. September 30, September 30, September 30, March
Slide 23: Consolidated Segment Reporting (continued)
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Consolidated Segment Reporting for the Quarter and Six months ended September 30, 2020 (₹ in Lakhs) Three Months ended / As at Year ended Year ended / As at Sr September 30, September 30, September 30, March
Slide 24: Other disclosures: Shareholder Complaints
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Other disclosures : Status of Shareholders Complaints as onSeptember 30, 2020 Number of Sr No. Particulars Complaints 1 Investor complaints pending at the begining of the quarter 1 2 Investor complaints recei
Slide 25: Other disclosures: Investor Complaints
HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) Other disclosures : Status of Investor Complaints for the quarter ended September 30, 2020 Number of Sr No. Particulars Complaints 1 Investor complaints pending at the begining of the quarter NIL 2 Investor c
Slide 26: Notes to Consolidated Results
Notes: 1. The above consolidated financial results of the group for the quarter and six months ended September 30, 2020 were reviewed by the Audit Committee and subsequently approved by the Board of Directors at its meeting held on October 19, 2020. 2. These consolidated financial results have been
Slide 27: Press Release: Market share grows by 235 bps to 17.5%
PRESS RELEASE - PERFORMANCE FOR THE HALF YEAR ENDED SEP 30, 2020 BSE Code: 540777 NSE Code: HDFCLIFE Market share grows by 235 bps to 17.5%; NBM strong at 25.1% Other Key Highlights: • 38% growth in Individual Protection APE, with share improving from 6% to 9% • 22% growth in renewal premium • 25.1%
Slide 28: Key Financial Ratios
Indian Embedded Value 23,332 20,124 16% 20,650 18,301 Value of new business 838 957 -12% 1,919 1,537 Protection based on Individual APE 241 175 38% 466 351 Protection based on APE 404 580 -30% 1,270 1,045 H1 FY21 H1 FY20 FY20 FY19 Key Financial Ratios New Business Margins 25.1% 27.5% 25.9% 24.6% Ope
Slide 29: Definitions: APE, AUM, EVOP
• Annualized Premium Equivalent (APE) - The sum of annualized first year regular premiums and 10% weighted single premiums and single premium top-ups • Assets under Management (AUM) - The total value of Shareholders’ & Policyholders’ investments managed by the insurance company • Embedded Value Oper
Slide 30: About HDFC Life
Established in 2000, HDFC Life is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings, Investment, Annuity and Health. As on September 30, 2020, the Company
Slide 31: Forward-looking statements disclaimer
future events. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Company’s control. Past performance is not a reliable indication of future performance. Before acting on any information you should consider the appropriateness of the information having regard to
Slide 32: HDFC Life Insurance – H1 FY21
HDFC Life Insurance Investor Presentation – H1 FY21
Slide 33: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Managing Covid-19 4 Customer Insights 5 Annexures 6 India Life Insurance Page 2
Slide 34: Performance Snapshot
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 1 Performance Snapshot
Slide 35: Executive summary: H1 FY21
Executive summary: H1 FY21 Expansion in market share1 by 235 bps from 15.2% to 17.5% Revenue growth and Individual WRP growth of 22% in Q2 helped neutralize the Q1 de-growth. 2% growth in H1 FY21 v/s Market share private industry de-growth of 11% Balanced product mix2 (UL: 23%, Par: 33%, Non-p
Slide 36: Demonstrating resilience in the current environment (1/2)
Demonstrating resilience in the current environment (1/2) Improving MoM business trends1 Expanding market share1 Rs Bn. -19% 12% 14% 43% 22% 2% 63% 58% 35% -20% 17% 35% Growth HDFC Pvt Industry Life sector H1 FY21 2% -11% -7% 27.5 28.1 17.5% H1 FY20 35% 16% 11% 17.4 15.2% 13.2 14.3 2 year 10.7 18% 1
Slide 37: Demonstrating resilience in the current environment (2/2)
Demonstrating resilience in the current environment (2/2) Strong growth in renewal premium Stable profitable growth Rs Bn. New Business Margins (NBM) 22% Improving MoM collection Remain cautious on 25.9% 25.6% 75.5 _ 24.6% 25.1% 24.3% 24.3% 61.8 persistency trends for next few quarters FY19 FY20
Slide 38: Our Strategy
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 2 Our Strategy
Slide 39: Key elements of our strategy
Key elements of our strategy 1 2 3 4 5 Focus on profitable Diversified Market-leading Reimagining Quality of Board growth distribution mix innovation insurance and management Ensuring sustainable Developing multiple Creating new product Market-leading digital Seasoned leadership and profitable growt
Slide 40: Focus on profitable growth
Focus on profitable growth H1 H1 FY18 FY19 FY20 Rs Bn. Profitable FY20 FY21 growth New business Margin 23.2% 24.6% 25.9% 27.5% 25.1% Economic Profit Value of new business 12.8 15.4 19.2 9.6 8.4 distribution mix Profit after tax (PAT) Balanced 11.1 12.8 13.0 7.3 7.8 Accounting Profit Underwriting pro
Slide 41: Analysis of change in IEV
Analysis of change in IEV1 Rs Bn. EVOP – 17.5 Profitable EVOP1% - 17.6% growth 9.2 0.2 233.3 8.4 0.7 8.4 206.5 ESOP Operating Economic distribution mix VNB exercises variances Balanced Unwind variances 151.3 134.6 innovation leading Market Adjusted Net worth (ANW) Value of in-force business (VIF) Re
Slide 42: Diversified distribution mix
Diversified distribution mix Focus on diversified mix 1 Strong and diversified network of 250+ traditional partners Banks NBFCs and MFIs SFBs Profitable growth 14% 19% 22% 21% 11% 5% 13% 13% 14% 4% 6% 9% distribution Balanced mix 71% 64% 55% 60% FY18 FY19 FY20 H1 FY21 innovation leading Market Banca
Slide 43: Addressing customer needs at every stage of life
Addressing customer needs at every stage of life <25 years 26-35 years 36 – 50 years 50+ years Risks Addressed Profitable Objective Simple Savings Borrowing Investments Asset Drawdown growth Pay off mortgage Mortality distribution Balanced Medical care mix Morbidity First Job Medical care Net Worth
Slide 44: Expanding market through consistent product innovation
Expanding market through consistent product innovation Group Poorna Suraksha Guaranteed returns, Comprehensive protection plan Profitable growth Retirement offering multiple choices of with option for life long & pension benefits under group platform Woman income FY15 FY17 FY18 FY19 FY20 FY21 distri
Slide 45: Our approach to retiral solutions
Our approach to retiral solutions Opportunity to grow the retiral corpus1 by 3x between FY20-25 Profitable growth 1. NPS 2. Individual income plans 2 ▪ Ranked #1 amongst private owned Pension ▪ Providing long term retiral solutions Fund Managers in terms of AUM ▪ Registered strong AUM growth of 70%
Slide 46: Product mix across key channels
Product mix across key channels1 Segment FY18 FY19 FY20 H1 FY21 Segment FY18 FY19 FY20 H1 FY21 UL 33% 26% 12% 9% Profitable UL 64% 64% 32% 27% growth Par 48% 40% 34% 37% Agency Par 25% 13% 18% 36% Banca 2 Non par savings 8% 17% 44% 30% Non par savings 5% 17% 40% 35% Term 3% 4% 4% 5% Term 11% 12% 12%
Slide 47: Simplifying the customer journey using building blocks
Simplifying the customer journey using 5 building blocks Profitable growth Platforms and Partner Journey Service Data Enrichment Ecosystems Integration Simplification Simplification and Analytics Insurance beyond digital: Products and services built on Customer sales journeys Simplified solutions fo
Slide 48: Journey simplification - enabling digital journeys
Journey simplification - enabling digital journeys Upload Automated Lead creation Form filling & Customer journey Prospecting & fulfillment online payment e-signature doc underwriting & FR fulfillment & verification Profitable growth End to end journey distribution Enables Uberized Digital Quick Cha
Slide 49: VServ: video based 'Phy-gital' mode of service
VServ: Industry first video based ‘Phy-gital’ mode of service Profitable growth Zero setup for customer Storage on Cloud distribution Balanced Secure mix Chat functionality for chat Operations Document upload enabled transactions innovation leading Market Encrypted Device agnostic (Mobile / Customer
Slide 50: Governance framework
Governance framework Board of Directors Profitable Independent and experienced Board growth Committees Corporate Board Risk Policyholder Nomination & Stakeholders’ Audit Investment With Profits Social Management Protection Remuneration Relationship Committee Committee Committee Responsibility Commit
Slide 51: Financial risk management framework
Financial risk management framework Natural hedges Product design & mix monitoring ▪ Protection and longevity businesses ▪ Prudent assumptions and pricing approach ▪ Unit linked and non par savings products ▪ Return of premium annuity products (>95% of annuity); Average age at entry ~60 years ▪ Quan
Slide 52: Performance of wholly-owned subsidiary companies
Performance of wholly-owned subsidiary1 companies HDFC Pension AUM, Rs Bn. HDFC International Life and Re 113.2 82.7 51.6 11.6 Mar'17 Mar'19 Mar'20 Sep'20 Fastest growing PFM (Pension Fund Manager) under the Registered growth of 63% in gross reinsurance premium in NPS architecture (YoY growth of
Slide 53: Managing Covid-19
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 3 Managing Covid-19
Slide 54: Dynamic approach to manage impact of the COVID-19 outbreak
Dynamic approach to manage impact of the COVID-19 outbreak Accelerated digital selling Focus on selling products with end to end digital customer journeys Digital servicing Communication to customers about digital touch-points for claims, renewal collection and customer queries Employee engagement/
Slide 55: Emerging opportunities and risks
Emerging opportunities and risks Opportunities Reinvent operating model Higher demand for Consolidation of market Enhanced focus on digital insurance share Work from home Increasing awareness Product innovation levels across mortality, M&A morbidity, longevity and interest rate produ
Slide 56: Managing impact of COVID-19 on business
Managing impact of COVID-19 on business New business / Customer Employee / Partner Policy servicing purchase interactions engagement ▪ Digital sales journey - End-to-end ▪ Renewal collections - ~88% of renewal payments (95% of policies) ▪ Seamless support experience - ▪ e-learning platform - 7,900+
Slide 57: Customer Insights
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 4 Customer Insights
Slide 58: Customer insights – Impact of Covid-19
Customer insights – Impact of Covid-19 Impact on LI category1,2 Evolved expectation due to Covid-192 Insurance sees a higher pickup post unlock with customers showing a higher disposition towards the category Majority of customers were more positive about the industry, driven by: 35% Realization of
Slide 59: Customer Insights – Customer Behaviour/Preferences
Customer Insights – Customer Behaviour/Preferences Top reasons to buy Life insurance Customer behaviour / trend 2019 rank 2013 rank The future intent to buy Life Insurance is the Protect family in case of death 1 1 highest amongst financial products driven To secure child’s education/marriage 2 2
Slide 60: Annexures
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 5 Annexures
Slide 61: Individual persistency for key channels and segments
Individual persistency for key channels and segments1 Across key channels (%) CY (H1 FY21) 91 93 85 85 87 88 77 77 78 79 72 75 69 67 69 69 66 64 Actuarial 53 47 Agency Banca Direct Company Financial 13th month 25th month 37th month 49th month 61st month Across key segments (%) PY (H1 FY20) 92 89 85
Slide 62: VNB and NBM walkthrough
VNB and NBM walkthrough Rs Bn. 9.57 0.38 0.20 0.05 0.56 Actuarial 8.38 Financial H1 FY20 APE impact Change in New Business Fixed cost H1 FY21 assumptions Profile 1 absorption NBM% 27.5% 0.0% -0.6% -0.2% -1.7% 25.1% ESG 1. Reflects the impact of difference in mix of segment/distribution channel/tenur
Slide 63: Sensitivity analysis
Sensitivity analysis Change in VNB Analysis based on key metrics Scenario % Change in EV Margin 1 Change in Increase by 1% -0.9% -1.5% Actuarial Reference rate Decrease by 1% 0.2% 0.7% Equity Market Decrease by 10% -0.1% -1.3% movement Increase by 10% -0.3% -0.7% Persistency (Lapse rates) Decrease b
Slide 64: Assets under management
Assets under management Assets Under Management Change in AUM 1 Rs Bn. Debt:Equity 61:39 62:38 71:29 67:33 UL:Traditional 54:46 50:50 43:57 43:57 55 234 Actuarial 1, 750 16% 18% 18% 111 1% 30% 1, 550 -20% 1, 350 54 Financial 1, 150 -70% 950 1,506 52 1,272 -120% 750 1,066 1,256 550 68 -170% 350 26 15
Slide 65: Stable capital position
Stable capital position Rs Bn. Dividend paid 3.3 4.0 - - NB premium growth 32% 32% 15% 7% 230% 120.0 203% 210% 192% Actuarial 188% 184% 190% 100.0 84.8 170% 80.0 70.8 22.1 150% 62.7 13.1 60.0 52.1 Financial 130% 12.7 20.9 11.3 19.2 110% 40.0 16.7 13.6 90% 20.0 38.5 41.8 33.3 70% 27.2 - 50% ESG Mar 3
Slide 66: Governance - Promoting responsible behavior
Governance - Promoting responsible behavior Governance structure Information / Cyber Security Risk Management and BCM Corporate governance policy ISO 27001:2013 and ISMS Risk management policy assessment program; Risk oversight by Senior Management & Board diversity policy o Independent au
Slide 67: Social initiatives - Culture of care and giving
Social initiatives - Culture of care and giving Inclusive growth Customer centricity Swabhimaan, the Corporate Social Responsibility wing is Improve lives with products designed to suit the different aligned with the UN Sustainable Development Goals (SDGs) life stage needs with focus on Educatio
Slide 68: Social initiatives – Human Capital Development
Social initiatives – Human Capital Development Attracting talent Employee engagement Talent management/retention Virtual hiring and on-boarding process Online yoga, mindfulness / meditation Fast track growth path for special without compromising on quality sessions, fitness challenges (Walkath
Slide 69: Environmental initiatives - Creating a better environment
Environmental initiatives - Creating a better environment Energy and Water Digitization Waste Management Energy efficiency and water Reduction of Paper Usage Segregation and proper disposal of conservation initiatives waste - dry and wet o Use of 3/5 star rated appliances Online /e-forms for c
Slide 70: India Life Insurance
Performance Snapshot Our Strategy Managing Covid-19 Customer Insights Annexures India Life Insurance 6 India Life Insurance
Slide 71: Growth opportunity: Under-penetration and favourable demographics
Growth opportunity: Under-penetration and favourable demographics Life Insurance penetration 1 Life Insurance density US$ 2 (2019) (2019) 18.3% 16.5% 8,979 India remains vastly under-insured, both in terms of penetration and density Huge opportunity to penetrate the 6.7% 4,129 6.0% 3,244 2,691 u
Slide 72: Low levels of penetration – Life protection
Low levels of penetration – Life protection 172 mn 68 mn 1.7 mn Protection gap 2 (2019) 83.0% 76.0% 74.0% 71.0% 70.0% India has the highest protection gap in 61.0% 55.0% 55.0% 54.0% the region, as growth in savings and 41.0% life insurance coverage has lagged behind economic and wage growth Prot
Slide 73: Macro opportunity – Retiral solutions
Macro opportunity – Retiral solutions India’s pension market is under-penetrated at Improvements in life expectancy will lead to an average post 4.8% of GDP retirement period of 20 years Pension Assets / GDP Ratio Life expectancy at age 60 130.7 22 22 120.5 20 19 18 18 17 16 56.4 60.8 43.2 4.8 India
Slide 74: Government bond auctions
Government bond auctions Government Bonds – Tenorwise Issuance Rs Cr 27% 21% 29% 35% 35% 63% 79% 71% 65% 65% FY17 FY18 FY19 FY20 H1FY21 >15yrs 154,520 180,529 204,000 238,000 138,000 <=15yrs 373,525 497,579 382,941 444,000 526,000 Total 528,045 678,109 586,941 682,000 664,000 Auction of >15 year m
Slide 75: Life Insurance: A preferred savings instrument
Life Insurance: A preferred savings instrument Household savings composition Financial savings mix 25% 22% 18% 18% 3% 8% 11% 16% 12% 13% 19% 18% 21% 26% 17% 52% 68% 65% 65% 16% 67% 50% 56% 47% 48% 32% 35% 35% FY10 FY13 FY16 FY19 FY10 FY13 FY16 FY20 Financial savings Physical savings Currency & depos
Slide 76: Industry new business trends
Industry new business1 trends 450 Sensex Private Players LIC 420 45 401 400 40 357 Individual WRP in Rs. Bn 350 35 315 Individual WRP in Rs bn 304 292 291 300 288 285 287 30 273 278 269 262 250 230 245 25 227 214 203 208 200 Sensex 200 175 178 20 172 160 150 124 15 100 10 50 5,0 0 - FY09 FY10 FY11 F
Slide 77: Private industry: Product and distribution mix
Private industry: Product and distribution mix Product mix 1 Distribution mix 2 Unit Linked Conventional Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business 66% 57% 9% 10% 10% 12% 14% 56% 3% 16% 20% 54% 5% 4% 52% 51% 51% 3% 3% 3% 3% 48% 49% 49% 3% 3% 3% 3% 46
Slide 78: Appendix
Appendix
Slide 79: Financial and operational snapshot (1/2)
Financial and operational snapshot (1/2) H1 FY21 H1 FY20 Growth FY20 FY19 FY18 CAGR Rs Bn. New Business Premium (Indl. + Group) 85.0 79.1 7% 172.4 149.7 113.5 23% Renewal Premium (Indl. +Group) 75.5 61.8 22% 154.7 142.1 122.1 13% Total Premium 160.5 140.9 14% 327.1 291.9 235.6 18% Individual APE 28.
Slide 80: Financial and operational snapshot (2/2)
Financial and operational snapshot (2/2) H1 FY21 H1 FY20 FY20 FY19 FY18 Overall New Business Margins (post overrun) 25.1% 27.5% 25.9% 24.6% 23.2% (1) Operating Return on EV 17.6% 19.6% 18.1% 20.1% 21.5% Operating Expenses / Total Premium 11.1% 14.0% 13.1% 13.1% 13.5% Total Expenses (OpEx + Commissio
Slide 81: Revenue and Profit & Loss A/c
Revenue and Profit & Loss A/c Revenue A/c Profit and Loss A/c Rs Bn. H1 FY21 H1 FY20 H1 FY21 H1 FY20 Premium earned 160.5 140.9 Income Reinsurance ceded (2.8) (1.9) Interest and dividend income 2.0 1.7 Income from Investments 150.7 31.9 Net profit/(loss) on sale 0.3 0.7 Other Income 0.7 0.6 Transfer
Slide 82: Balance sheet
Balance sheet Sep 30, 2020 Sep 30, 2019 Mar 31, 2020 Rs Bn. Shareholders’ funds Share capital (including Share premium) 24.4 23.9 24.2 Accumulated profits 53.5 40.1 45.7 Fair value change 0.4 (0.4) (1.9) Sub total 78.2 63.6 68.0 Borrowings 6.0 - - Policyholders’ funds Fair value change 11.2 8.0 0.5
Slide 83: Segment wise average term and age
Segment wise average term and age1 Average Policy Term excluding annuity (Yrs) Average Customer Age excluding annuity (Yrs) H1 FY21: 25.2 (H1 FY20: 15.7) H1 FY21: 35.7 (H1 FY20: 37.6) UL 37 UL 12 36 12 Par 33 42 36 Par 14 32 Non-par Health 32 Non-par Health 23 16 Non-par Savings 36 39 Non-par Saving
Slide 84: Summary of Milliman report on our ALM approach
Summary of Milliman report on our ALM approach1 Scope of review Portfolios reviewed • Assess appropriateness of ALM strategy to manage Portfolio 1: Savings and Protection – All non-single premium interest rate risk in non-par savings business non-par savings contracts and group protection products
Slide 85: Indian Embedded value: Methodology and Approach (1/2)
Indian Embedded value: Methodology and Approach (1/2) Overview Indian Embedded Value (IEV) consists of: Adjusted Net Worth (ANW), consisting of: – Free surplus (FS); – Required capital (RC); and Value of in-force covered business (VIF): Present value of the shareholders’ interest in the earnings
Slide 86: Indian Embedded value: Methodology and Approach (2/2)
Indian Embedded value: Methodology and Approach (2/2) Components of Value in-force covered business (VIF) Present value of future profits (PVFP): PVFP is the present value of projected distributable profits to shareholders arising from the in-force covered business determined by projecting the sha
Slide 87: Embedded Value: Economic assumptions
Embedded Value: Economic assumptions1 Forward rates % Spot rates % Years As at Sep 30, 2020 As at Sep 30, 2019 As at Sep 30, 2020 As at Sep 30, 2019 1 3.90 5.67 3.83 5.51 2 5.12 6.14 4.41 5.74 3 6.01 6.58 4.89 5.95 4 6.65 6.94 5.28 6.14 5 7.09 7.25 5.59 6.31 10 7.67 7.90 6.45 6.88 15 7.37 7.85 6.71
Slide 88: Glossary (Part 1)
Glossary (Part 1) APE (Annualized Premium Equivalent) - The sum of annualized first year regular premiums and 10% weighted single premiums and single premium top-ups Backbook surplus – Surplus accumulated from historical business written Conservation ratio - Ratio of current year renewal premi
Slide 89: Glossary (Part 2)
Glossary (Part 2) Operating expense - It includes all expenses that are incurred for the purposes of sourcing new business and expenses incurred for policy servicing (which are known as maintenance costs) including shareholders’ expenses. It does not include commission. Operating expense ratio -
Slide 90: Disclaimer
Disclaimer This presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase any securities (“Securities”) of HDFC Life Insurance Company Limited (formerly HDFC Standard Life Insurance Company Limited)
Slide 91: Thank you
Thank you
HDFC Life Insurance Company — H1 FY21 Earnings Presentation on 6ix