Hdfc Life Insurance Co. Ltd. · NSE:HDFCLIFE
Hdfc Life Insurance — IIFL Conference February 2021
22 slides from Hdfc Life Insurance's conference presentation, Feb 22, 2021
Slide 1: A young country, getting older: Opportunity in the retirement space in India
A young country, getting older... Opportunity in the retirement space in India Vibha Padalkar MD & CEO, HDFC Life Insurance Company Ltd. This is the sole and exclusive property of HDFC Life. February 22, 2021
Slide 2: Most people have a "we'll see when we get there" approach to retirement
Most people have a “we’ll see when we get there” approach to retirement 2
Slide 3: India set to cash in on demographic dividend, with rapidly increasing population over 60
India, set to cash-in on the ‘demographic dividend’ in the coming decades, also has a rapidly increasing population aged over 60 years By 2050, 1 in 7 people over the age of India’s median population to Over 40% of elderly people 60 will live in India, compared to 1 in 8 increase from ~28 yrs in 202
Slide 4: Societal changes and low retirement readiness are leading to a significant retirement savings gap
Changes in our societal structures, low levels of retirement readiness are leading to a significant retirement savings gap Slow growth in financial literacy rate 83% of unorganized workforce 52% of elderly population fully not under any formal pension 27% in 2019 vs. 20% in 2013 scheme dependent on
Slide 5: India isn't alone: the pension crisis is worldwide and the gap continues to widen
India isn’t alone…the heat of the pension crisis can be felt worldwide and the gap continues to widen “Private sector pensions also need Pensions time to be simplified and made less bomb waiting complex. People need to be able to to go off unless understand them and know their we take action money i
Slide 6: India's pension market is woefully under-penetrated at 4.8% of GDP
However, compared to global benchmarks, India's pension market is woefully under-penetrated at 4.8% of the GDP Pension Assets/GDP Ratio (in %) 166.7 130.7 126.0 120.5 101.7 94.0 84.2 65.4 60.8 56.4 43.2 44.3 45.4 13.8 9.0 1.5 4.8 India has a long way to go! 6 Source: “Global Pension Assets Study 201
Slide 7: The Indian pensions space continues to evolve, with pace picking up
The Indian pensions space continues to evolve, with the pace picking up in recent years Establishment of PFRDA Shift from Defined Benefit to Defined Contribution NPS (National Pension Scheme) introduced for Central Govt. employees NPS expanded and extended to all Indian citizens NPS reforms •
Slide 8: Potential opportunity estimated over INR 100 tn in AUM by 2030
The potential opportunity is estimated to be over INR 100 tn in AUM by 2030 Estimated market opportunity (organized sector)* Total Pension AUM (₹ trillion) Growth in AUM to be aided by portability across 70,00,000 pension classes 60,00,000 12% 18% 50,00,000 118 tn 40,00,000 46% 46% 30,00,000 20,00,0
Slide 9: But there are challenges...
But there are challenges...
Slide 10: Significant lack of awareness regarding systematic retirement planning
There is significant lack of awareness among Indians regarding systematic retirement planning While mindshare to invest towards retirement …the culture of saving in physical assets within financial savings is increasing… continues Financial savings mix Household savings composition 3% 8% 11% 16% 18%
Slide 11: Low coverage of mandatory pension schemes puts onus of retirement planning on individuals
Also, the low coverage of mandatory pension schemes puts the onus of retirement planning on individuals Mandatory pension schemes coverage (%) 93% 95% 92% 75% 71% 72% 51% 40% 36% 29% 18% 13% 9% 6% India Indonesia Thailand China USA UK Japan By population (15-64) Active Labour Force India has signifi
Slide 12: How can we make India a Pensioned Society?
How can we make India a Pensioned Society? 12
Slide 13: Addressing specific areas to boost pension coverage in India
By addressing specific areas to boost pension coverage in India 1 Awareness about Pension Investment 2 Products and Implementation ● Allow flexible payment and withdrawal options ● Increase financial literacy ● Explore innovative annuity solutions ● Encourage investment in pension schemes ● Widen th
Slide 14: We are putting our money where our mouth is...
We are putting our money where our mouth is… (HDFC Life’s ecosystem) 14
Slide 15: Providing flexible retirement planning options to customers
Providing flexible retirement planning options to customers < 30 years 30 – 45 years 40 – 55 years > 55 years Customer objective Save small Borrow Invest Asset drawdown HDFC Life HDFC Life HDFC Life Click2Retire Sanchay Par Click2 Advantage Sanchay Plan Wealth Retired folks wanting Plus to pursue in
Slide 16: Building a pension distribution ecosystem to deepen coverage
Working to build a pension distribution ecosystem that will help deepen coverage Large distribution network that enables HDFC Life–Pension distribution ecosystem wider reach Largest player in the private sector 116,115 - Number of Agents ASP 250+ traditional partners Servicing 100+ (Annuity co
Slide 17: Creating adjacencies like Life99, a one stop solution for retiral needs
Creating adjacencies like Life99, a one stop solution for all retiral needs across employee demographics, will enhance customer experience Annuity options for retirement Subscribe to 6 NPS & save taxes Buy insurance 7 and voluntary 5 covers Tools like tax & NPS calculator etc. View employee 8 4 bene
Slide 18: Innovating in long term savings and retirement space
Innovating in long term savings and retirement space… Long Term Income Plans Annuity Plans HDFC Life HDFC Life Sanchay Sanchay Par Par Advantage Advantage Pension PensionGuaranteed GuaranteedPlan Plan • Payout from 1st month • Guaranteed income • Limited premium payment term • Wide range of annuity
Slide 19: Driven by risk calibrated investment opportunities
...driven by risk calibrated investment opportunities Product Design & mix 01 Natural Hedges 02 monitoring ● Protection and longevity businesses ● Prudent assumptions and pricing approach ● Unit linked and non par savings products ● > 95% ROP; deferment period <4 yrs ● Regular monitoring of interest
Slide 20: Our efforts are now bearing fruit!
Our efforts are now bearing fruit! Time taken to reach AUM Milestones (in months) for HDFC Pension 7 16 67 ~60X growth in share of annuity in HDFC Life’s premium from 2010 to 2020 In under 3 years, the number of Group 5,000 Cr. 10,000 Cr. 15,000 Cr. clients for annuity has more than doubled Increasi
Slide 21: Some comic wisdom...
Some comic wisdom... -TSAW AN ARTICLE. THAT SAYS MOST PEOPLE DON'T HAVE ANY KIND OF CSaotAcorsape RETIREMENT PLAN. ) Dibert core 123th GO 20K Soot Adams, inc ie wy Une Lites
Slide 22: Thank You
Thank You
HDFC Life Insurance Company — IIFL Conference February 2021 on 6ix