Hdfc Life Insurance Co. Ltd. · NSE:HDFCLIFE
Hdfc Life Insurance — Investor Presentation (2022)
78 slides from Hdfc Life Insurance's investor presentation, 2022
Slide 1: Investor Presentation – FY22
Investor Presentation – FY22
Slide 2: Executive summary: FY22
Executive summary: FY22 Revenue & Scale Profitability & Cost Customer & Capital Growth 16% FY22 27.4% FY22 92% Individual New Business 13th month WRP Market Margin (NBM) persistency2 FY21 26.1% FY21 90% 14.8% Share Rs (Bn.) 218.1 Rs (Bn.) 26.8 Overall 99.6% Renewal VNB Claim settlement premium Growt
Slide 3: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 3
Slide 4: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 4
Slide 5: Consistent, predictable, sustained performance
Consistent, predictable, sustained performance Rs bn Holistic growth Consistent track record over multiple periods New business premium Renewal premium VNB 242 218 113 122 80 26.8 40 21.9 19.2 FY14 FY18 FY22 FY14 FY18 FY22 12.8 9.2 7.4 Protection APE2 Annuity new business 13.2 48.7 FY16 FY17 FY18 FY
Slide 6: Demonstrating resilience in the current environment (1/2)
Demonstrating resilience in the current environment (1/2) Rs bn Steady Individual WRP trends Strong, sustainable growth1 Overall 7.2% 8.1% 9.2% 9.3% mkt share Growth HDFC Life Pvt sector Industry Pvt. mkt 12.5% 14.2% 15.5% 14.8% share YoY 5% 19% 17% 16% FY22 16% 22% 16% growth 2 yr CAGR 17% 14% 9% 8
Slide 7: Demonstrating resilience in the current environment (2/2)
Demonstrating resilience in the current environment (2/2) Rs bn Focus on diversified channel mix1 Steady expansion in New Business Margins 4% 9% 7% 6% 13% 20% 25% 14% 22% 14% 13% 14% VNB has 19% 19% 19% grown at 22% 24% CAGR between _ 27.4% 64% 61% 60% 25.9% 26.1% FY17-22 55% 24.6% FY19 FY20 FY21
Slide 8: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 8
Slide 9: 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 Developing multiple Creating new Market-leading Seasoned sustainable and channels of growth product digital capabili
Slide 10: Focus on profitable growth
Focus on profitable growth FY19 FY20 FY21 FY22 Rs bn Profitable growth New business Margin 24.6% 25.9% 26.1% 27.4% Economic Profit Value of new business 15.4 19.2 21.9 26.8 distribution mix Diversified Profit after tax (PAT) 12.8 13.0 13.6 12.11 Accounting Underwriting profits 9.0 10.9 4.4 Profit 7.
Slide 11: Analysis of change in IEV
Analysis of change in IEV EVOP – 50.5 Rs bn EVOP1% - 19.0% Profitable growth 29.1 329.6 1.5 -6.5 26.8 -0.5 307.7 -2.0 -7.3 300.5 23.0 -0.7 Operating Covid Economic Dividend & variances impact Cash Exide Life 266.2 variances ESOPs Change in VNB payout for EV distribution mix operating acquisition Div
Slide 12: Diversified distribution mix enabled by multiple levers
Diversified distribution mix enabled by multiple levers Proprietary1 Banks , SFBs, Other CAs NBFCs, MFIs Brokers & Aggregators Profitable growth 1.1L+ Agents distribution Diversified mix 372 Branches 48 Digital Branches2 www.hdfclife.com HDFC Life App innovation Market- leading Group, Pension & Inte
Slide 13: Bancassurance powered by innovation, technology and people
Bancassurance powered by innovation, technology and people Profitable growth Product Partner experience Tech integration & Seamless Capability building & proposition & engagement analytics operations resourcing distribution Diversified Comprehensive Defined One stop Straight through Learning on the
Slide 14: Technology driving agent productivity in Agency channel
Technology driving agent productivity in Agency channel Profitable growth Onboarding Skilling & Engagement Enablement Support & Servicing distribution Diversified InstaPRL1 a simple, paperless and hassle free Digital Learning & Skilling HDFC Life Easy – platform benefitting mix FC2 onboarding platfo
Slide 15: Expanding market through consistent product innovation
Expanding market through consistent product innovation Profitable growth FY15-18 FY19-21 FY22 distribution Diversified mix Sanchay Fixed Maturity Plan (Non-par savings) Click 2 Protect 3D Sanchay Plus Guaranteed return savings plan which offers complete flexibility in Plus (Protection) (Non-par savi
Slide 16: Addressing customer needs at every stage of life
Addressing customer needs at every stage of life <25 years 25-35 years 36 – 50 years 50+ years Risks Addressed Profitable Objective Simple Savings Borrowing Investments Asset Drawdown growth Pay off mortgage Mortality distribution Diversified Medical care mix Morbidity First Job Medical care Net Wor
Slide 17: Our approach to retiral solutions
Our approach to retiral solutions 1. NPS Profitable growth ▪ Market share grew from 34% in Mar’21 to 37% in Mar’22 ▪ Largest Pension Fund Manager (PFM) in Retail amongst all PFMs and Corporate NPS segment, with AUM of Rs ▪ Company has over 1.1 mn customers - ~0.8 mn in retail 284 bn1 segment and ~0.
Slide 18: Evolution of protection prices in India
Evolution of protection prices in India Private insurers Scale up of Credit Life Introduction of fixed Tightened reinsurer guidelines based Industry working start selling Term benefit Health plans on experience towards calibrated growth Profitable growth distribution Diversified mix Sale of online T
Slide 19: Our experience during the journey gave us multiple insights
Our experience during the journey gave us multiple insights An illustrative Protection growth trajectory of HDFC Life1 depiction of Profitable segmental risk growth based on past experience 13.3 12.7 10.7 distribution Diversified 10.5 mix 6.2 4.7 4.8 4.6 innovation Market- leading 3.3 3.5 2.5 1.5 FY
Slide 20: Our protection philosophy is based on our experience across cohorts
Our protection philosophy is based on our experience across cohorts Supply side Profitable growth considerations Our Focus Areas Adverse mortality experience in pandemic Strengthening underwriting practices and Demand side use of deep learning underwriting models distribution Diversified Recalib
Slide 21: Strengthening underwriting and simplifying customer journey
Strengthening underwriting and simplifying customer journey UW Engine1 MediEasy Profitable Assisted real time requirement closure – growth for hassle free medicals Real time assisted financial scrutiny and help from financial desk distribution Diversified mix Real time video medicals innovation Real
Slide 22: Multi-pronged risk management approach for protection
We leverage multi-pronged risk management approach for protection 1 2 3 4 Profitable growth Reducing incidence of Limiting impact on Balancing pricing & Strong governance & fraud & early claims profitability & solvency underwriting audits @Partners distribution Diversified Analytics and Data Enrichm
Slide 23: Product mix across key channels
Product mix across key channels1 Segment FY19 FY20 FY21 FY22 Segment FY19 FY20 FY21 FY22 UL 26% 12% 10% 16% Profitable UL 64% 32% 27% 29% growth Par 40% 34% 37% 33% Agency Par 13% 18% 37% 33% Banca 2 Non par savings 17% 44% 30% 33% Non par savings 17% 40% 39% 39% Term 4% 4% 4% 4% Term 12% 12% 11% 10
Slide 24: Aligned to make life simpler for customers
Aligned to make life simpler for customers Profitable growth 1 3 5 distribution Diversified mix Give me a Accelerate SERVICE Give me PLATFORMS simple journey JOURNEY SIMPLIFICATION frictionless Nudge me in my independent from purchase SIMPLIFICATION for connect and world / buying service personaliza
Slide 25: Journey simplification
Journey simplification Profitable growth distribution Diversified mix innovation Market- leading Reimagining insurance management Board and Quality of Life Easy InstaQuote Voice End to end Term buying journey Quote generation app Voice enabled buying journey 21K+ applications submitted 30K+ daily qu
Slide 26: Partner integration
Partner integration Profitable growth distribution Diversified mix innovation Market- leading Reimagining insurance LifeNext API Bank Partner Portal End-to-end portal for group partners creating a A portal to publish & test APIs1 for data and services One stop shop for all MIS2, self and customer ma
Slide 27: Service simplification
Service simplification Profitable growth distribution Diversified mix innovation Market- leading Reimagining insurance management Board and Quality of V Serv Life.AI Voice.AI Industry first video based ‘Phy-gital’ mode of service 24X7 NLP2 based WhatsApp bot Availability of servicing on Voice OTP1 e
Slide 28: Data Labs
Data Labs Underwriting engine NLP2 engine FaceSense SPOK Profitable growth Industry first: automated conversational AI2 Face recognition Voice bot to manage Email bot using NLP2 underwriting end-to-end renewal call for service queries Persistency models AgeTymer Emolyzer Virtual assistant for Face a
Slide 29: Platforms
Platforms Profitable growth Offers fitness- Physical and distribution Diversified related mental well-being mix challenges content innovation Market- leading Integrated with Periodic BMI/ fitness wearables fitness checks Reimagining insurance management Board and Quality of Rider Attachment Life Rew
Slide 30: Futurance program – Start-up outreach for driving Innovation
Futurance program – Start-up outreach for driving Innovation Initiative started in June 380+ applications Collaboration with Profitable 2019 in collaboration growth with IvyCamp Ventures received 85+ startups Advisors distribution Diversified Sample highlights of POC conducted mix innovation Market-
Slide 31: Leveraging technology to build resilience
Leveraging technology to build resilience Architecture Resilience – Scalability and Efficiency Profitable growth Modular Low/no code distribution Diversified architecture Custom APIs Data Lake Platforms Cloud mix Workforce Resilience – Hybrid Working Environment innovation Market- leading Morale and
Slide 32: Emphasis on digital across customer touch-points
Emphasis on digital across customer touch-points New business / Customer Employee / Partner Policy servicing purchase interactions engagement ▪ Digital sales journey - End-to-end ▪ Digital Renewal collections – 87% based on renewal premiums ▪ Seamless support experience – ▪ e-learning platform –6,60
Slide 33: Governance framework
Governance framework Board of Directors Profitable growth Independent and experienced Board Committees Risk Policyholder Nomination & Corporate Social Stakeholders’ Audit Investment With Profits Capital Raising Board Management Protection Remuneration Responsibility Relationship Committee Committee
Slide 34: 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 ~59 years ▪ Defe
Slide 35: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 35
Slide 36: Importance of Financial Instruments and Triggers to buy LI
Importance of Financial Instruments and Triggers to buy LI1 82% 73% 50% Savings 42% Bank Life Account • Life insurance ranks amongst top 3 26% Insurance Bank financial instruments 10% Fixed Health Deposits 6% Insurance Post Office [Svaasth • Importance of life insurance as an Bima] 4% Pension Scheme
Slide 37: Customer Insights – Women Policyholders
Customer Insights – Women Policyholders HDFC Life Customer Insights Participation of Women in Life Insurance1 Percentage of female policyholders • Women 3-year APE CAGR growth for women customers: 23% comprise 69% 73% roughly 49% of the total population in 31% 27% India Women constitute >30% of poli
Slide 38: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 38
Slide 39: Exide Life Performance Snapshot: 12M FY22
Exide Life Performance Snapshot: 12M FY22 Scale Profitability & Cost Customer & Capital Others Individual APE VNB Margin (Pre-OR) 13M Persistency Channel Mix1 Rs bn: 7.3 FY22: 44% FY22: 78% Agency: 57% Growth: 22% FY21: 35% FY21: 75% Banca: 7% Broker: 22% Direct: 14% Opex ratio Claim Settlement Rati
Slide 40: Integration – Focus areas
Integration – Focus areas Accelerating revenues … Realizing cost savings … Augmenting proprietary growth channels Optimizing nation-wide geographic presence • Scaling-up with cross-entity best practices and (offices, branches, hubs) brand value Access to wider distribution network with focus Rationa
Slide 41: Exide Life transaction timeline
Exide Life transaction timeline Step 1: Step 3: Step 5: Step 7: Announcement of Application filed with IRDAI Integration Phase-1 (9- Final approval for transaction and CCI for acquisition, 12 months) merger (expected in (Sep 3, 2021) ongoing interactions H2 FY23) ₹ Step 2: Step 4: Step 8: Step 6
Slide 42: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 42
Slide 43: Our ESG Strategy
Our ESG Strategy 5 pillars of ESG Strategy Actuarial Financial External Validation ESG • MSCI rating improved from ‘BB’ in October 2019 to ‘BBB’ in August 2020 Active engagement with external agencies including MSCI, S&P Integrated report and ESG • S&P Global (DJSI) percentile improved Report publis
Slide 44: Ethical Conduct & Governance
Ethical Conduct & Governance Governance structure & Compensation Risk management and BCM Information/Cyber Security Framework Actuarial Information/cyber security Fraud risk management ISO 27001:2013 and Values program; Corporate governance Board evaluation & Disciplinary Panel for ISMS assessment p
Slide 45: Responsible Investment
Responsible Investment Responsible Investment Policy Sustainable Equity Fund Objective What is Sustainable Equity fund & why invest in it? To generate optimal risk adjusted returns over the long term This fund shall seek to generate returns from investing in Actuarial companies with high ESG standar
Slide 46: Employee Engagement & Diversity, Equity and Inclusion (DEI)
Employee Engagement & Diversity, Equity and Inclusion (DEI) Special Recognition Employee diversity, equity & inclusion o Great Places to Work – Amongst top 100 Best Places o Promoting DEI ally ship: leadership o Great Places to Work for Women– development, communication, Amongst top 100 Best Places
Slide 47: Holistic Living: Inclusive Growth
Holistic Living: Inclusive Growth Education & Livelihood 3.5 lakh+ Actuarial Beneficiaries Health & Sanitation 25 Implementation Partners Environmental Sustainability 20+ Projects Financial Others 20+ States and UTs “ ESG Total CSR Rs 174 mn Spent in FY 2021-22 ” Support 12 out of the 17 UN SDGs 47
Slide 48: Holistic Living: Delivering superior customer experience
Holistic Living: Delivering superior customer experience Customer Centricity Simplifying buying journeys through platforms Online claim processing for eligible Journey simplification – like LifeEasy (online term purchase) customers via EasyClaims platform frictionless sales and Actuarial service Doc
Slide 49: Sustainable Operations
Sustainable Operations Energy and water Digitization - Reduction of Paper Usage Waste management o Introduction of E-business cards & o 82% of air-conditioners ID cards with 3 or 5 star rating o Online /e-forms for customers o 94% of branches use Actuarial LED based lighting o Annual report FY20 & F
Slide 50: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 50
Slide 51: Improvement in overall persistency trends
Improvement in overall persistency trends1 Across key channels (%) CY (FY22) 93 97 92 92 87 88 88 86 83 80 78 79 79 70 73 71 66 69 Actuarial 58 53 Agency Banca Direct Company Financial 13th month 25th month 37th month 49th month 61st month Across key segments (%) PY (FY21) 95 93 90 87 90 85 82 80 81
Slide 52: Improvement in overall persistency trends
Improvement in overall persistency trends1 Across key channels (%) CY (FY22) 90 89 87 86 82 79 77 78 70 67 68 66 67 64 62 63 Actuarial 58 57 54 54 Agency Banca Direct Company Financial 13th month 25th month 37th month 49th month 61st month Across key segments (%) PY (FY21) 90 93 87 85 82 79 80 75 71
Slide 53: Improving VNB trajectory
Improving VNB trajectory Rs bn 22% 1.3 0.8 26.8 3.6 0.8 Actuarial 21.9 Financial FY21 Impact of higher APE Change in assumptions New Business Profile 1 Fixed cost absorption FY22 VNB Growth NBM% 26.1% 0.0% -0.8% 1.3% 0.8% 27.4% ESG 1. Reflects the impact of difference in mix of segment/distribution
Slide 54: Sensitivity analysis – FY22
Sensitivity analysis – FY22 Change in VNB Analysis based on key metrics Scenario % Change in EV Margin 1 Change in Increase by 1% -1.4% -2.0% Actuarial Reference rate Decrease by 1% 0.8% 1.6% Equity Market Decrease by 10% -0.1% -1.4% movement Increase by 10% -0.6% -0.6% Persistency (Lapse rates) Dec
Slide 55: Capital position
Capital position Rs bn NB premium growth 32% 15% 17% 20% 140.0 201% 210% 188% Actuarial 184% 190% 120.0 176% 170% 94.3 97.7 100.0 14.3 150% 80.0 24.0 70.8 62.7 27.8 130% 13.1 Financial 60.0 12.7 23.4 110% 19.2 40.0 16.7 90% 55.6 46.9 20.0 33.3 38.5 70% - 50% Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 Ma
Slide 56: Assets under management
Assets under management Change in AUM 1 Rs bn Debt: Equity 62:38 71:29 64:36 63:37 UL:Traditional 50:50 43:57 43:57 39:61 Actuarial 466 303 18% 1% 37% 17% 2,150 1,650 232 35 Financial 2,042 1,150 1,738 165 131 650 1,256 1,272 104 103 150 FY21 FY22 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 Mar 31, 2022
Slide 57: Agenda
Agenda 1 Performance Snapshot 2 Our Strategy 3 Customer Insights 4 Exide Life Transaction Update 5 Our approach to ESG 6 Annexures 7 Life insurance in India Page 57
Slide 58: Growth opportunity: Under-penetration and favorable demographics
Growth opportunity: Under-penetration and favorable demographics Life Insurance penetration 1 Life Insurance density US$ 2 19.2% (FY 2021) (FY 2021) India remains vastly under-insured, both in 14.0% 8,983 terms of penetration and density Huge opportunity to penetrate the 7.6% 4,528 underserviced
Slide 59: 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% the region, as growth in savings and life 55.0% 55.0% 54.0% insurance coverage has lagged behind 41.0% economic and wage growth Prot
Slide 60: 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 9.3% of GDP retirement period of 20 years 131.7 Life expectancy at age 60 96.8 20 19 18 17 18 17 16 15 50.6 54.3 21.2 9.3 India Japan South Hong Kong USA A
Slide 61: Life Insurance: A preferred savings instrument
Life Insurance: A preferred savings instrument Household savings composition Financial savings mix 25% 22% 18% 19% 3% 8% 11% 15% 12% 13% 19% 18% 20% 26% 17% 52% 60% 14% 68% 65% 67% 50% 56% 51% 48% 40% 32% 35% FY10 FY13 FY16 FY20 FY10 FY13 FY16 FY20 Financial savings Physical savings Currency & depos
Slide 62: Industry new business trends
Industry new business1 trends Individual WRP in Rs bn Sensex Private players 57% 52% 46% 37% 38% 38% 49% 52% 54% 56% 58% 57% 60% 63% Market share Growth % Private 1% 7% -20% -24% 2% -3% 16% 14% 26% 24% 12% 5% 8% 22% LIC -22% 29% 4% 11% -4% -2% -27% 3% 15% 13% 5% 8% -3% 7% Overall -10% 17% -9% -5% -2
Slide 63: Private industry: Product and distribution mix
Private industry: Product and distribution mix Product mix 1 Distribution mix 2 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Unit Linked Conventional 61% 57% 9% 10% 10% 12% 14% 56% 3% 16% 16% 54% 5% 4% 52% 51% 51% 3% 3% 3% 3% 3% 48% 49% 49% 3% 3% 3% 46
Slide 64: Government bond auctions
Government bond auctions Government Bonds – Tenorwise Issuance Rs cr 71% 65% 65% 72% 73% 79% 29% 35% 35% 28% 27% 21% FY17 FY18 FY19 FY20 FY21 FY22 <=15yrs 3,73,525 4,97,579 3,82,941 4,44,000 10,01,835 8,48,000 >15yrs 1,54,520 1,80,529 2,04,000 2,38,000 2,65,575 3,31,000 Total 5,28,045 6,78,109 5,86,
Slide 65: Appendix
Appendix 65
Slide 66: Financial and operational snapshot (1/2)
Financial and operational snapshot (1/2) FY22 FY21 Growth FY20 FY19 CAGR Rs bn. New Business Premium (Indl. + Group) 241.5 201.1 20% 172.4 149.7 16% Renewal Premium (Indl. +Group) 218.1 184.8 18% 154.7 142.1 14% Total Premium 459.6 385.8 19% 327.1 291.9 15% Individual APE 81.7 71.2 15% 61.4 52.0 17%
Slide 67: Financial and operational snapshot (2/2)
Financial and operational snapshot (2/2) FY22 FY21 FY20 FY19 Overall New Business Margins (post overrun) 27.4% 26.1% 25.9% 24.6% (1) Operating Return on EV 19.0% 18.5% 18.1% 20.1% Operating Expenses / Total Premium 12.3% 12.0% 13.1% 13.1% Total Expenses (OpEx + Commission) / Total Premium 16.5% 16.4
Slide 68: Revenue and Profit & Loss A/c
Revenue and Profit & Loss A/c Rs bn Revenue A/c1 Profit and Loss A/c1 FY22 FY21 FY22 FY21 Premium earned 459.6 385.8 Income Reinsurance ceded (5.7) (4.6) Interest and dividend income 4.8 4.4 Income from Investments 192.2 326.8 Net profit/(loss) on sale 3.1 2.1 Other Income 1.5 1.6 Transfer from Poli
Slide 69: Balance sheet
Balance sheet March 31, 20221 Mar 31, 2021 Rs bn Shareholders’ funds Share capital (including Share premium) 86.7 25.0 Accumulated profits 67.3 59.3 Fair value change 0.8 2.1 Sub total 154.8 86.4 Borrowings 6.0 6.0 Policyholders’ funds Fair value change 21.7 25.6 Policy Liabilities 1,043.4 855.2 Pro
Slide 70: Segment wise average term and age
Segment wise average term and age1 Average Policy Term excluding annuity (Yrs) Average Customer Age excluding annuity (Yrs) FY22: 22.6 (FY21: 24.7) FY22: 36.4 (FY21: 35.8) UL 37 UL 12 12 37 41 Par 33 Par 33 42 21 Non-par Health 32 Non-par Health 24 33 Non-par Savings 12 37 12 Non-par Savings 36 Non-
Slide 71: Summary of Milliman report on our ALM approach – FY20
Summary of Milliman report on our ALM approach – FY20 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 pr
Slide 72: 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 73: 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 74: Embedded Value: Economic assumptions
Embedded Value: Economic assumptions1 Forward rates % Spot rates % Years As at Mar 31, 2021 As at Mar 31, 2022 As at Mar 31, 2021 As at Mar 31, 2022 1 3.95 4.34 3.87 4.25 2 5.31 5.65 4.52 4.87 3 6.27 6.70 5.04 5.41 4 6.95 7.43 5.46 5.85 5 7.42 7.90 5.80 6.20 10 7.97 8.36 6.71 7.10 15 7.52 7.97 6.95
Slide 75: 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 76: 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 77: 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 (“HDFC Life” or the “Company”) in India, the United Stat
Slide 78: Thank You
Thank You me 21 YEARS
HDFC Life Insurance Company — Investor Presentation (2022) on 6ix