Key highlights from HDFC Life Insurance Company Ltd (HDFCLIFE) Q1 FY23 Earnings Concall
Management Update:
- HDFCLIFE said that its HDFC Pension crossed the 30,000 crore AUM mark, almost doubling its AUM in the last 15 months. As on June 30th, 2022, HDFC Pension had a market share of 38%, maintaining its leadership position in the private Pension Fund Manager space.
Q&A Highlights:
- Hitesh Gulati from Haitong asked about VNB margin if there is some change in operating assumption. Vibha Padalkar MD replied that these are change in assumptions vs. the assumptions put in last year. This is a strengthening of assumption that is done annually.
- Adarsh from CLSA asked about protection in term life seeing a 30-40% drop. Suresh Badami ED said there is enough opportunity for HDFCLIFE to be able to grow protection. The company added that given there are certain good products in the market, one may probably see a little tepid growth. But this is on the back of a fair amount of demand, which came in last year.
- Sanketh Godha of Spark Capital asked about the sustenance of the credit protect business. Suresh Badami ED replied that the loan growth would continue at a certain rate and may not be as high given that last year, the base effect started coming into place between Q2, Q3, Q4. However, a significant growth on the partner loan disbursement and CP business can be expected for rest of year.
- Sanketh Godha of Spark Capital enquired about the impact of higher interest rates on both savings and spends. Niraj Shah CFO replied that ROP is seen as a hybrid in terms of buying protection, but if nothing happens, then money comes back. So it’s a bit of a hybrid between protection and savings. That does address the current sentiment as well.
- Sanketh Godha of Spark Capital asked about the company’s market share in HDFC Bank vs. FY22 in total. Vibha Padalkar MD said that it can’t give the number as for each partner it changes QonQ. At HDFC Bank, HDFCLIFE will continue to write business that makes sense
- Shyam Srinivasan from Goldman Sachs asked about solvency margins and if the company is full up in terms of capacity to do any more incremental sub-debt. Vibha Padalkar MD said that HDFCLIFE’s growth today is not getting impacted because of the solvency. In terms of raising equity, might look at it depending on whether, is there growth opportunities or perceive prolonged stress in the system.
- Akshen Thakkar from Fidelity enquired about the EV, how much of the hit was due to interest rate and how much was due to equity market. Srinivasan P Chief Actuary replied that equity is around INR400-odd crores and the balance is from interest rates, out of the total INR1,200 crores.
- Nitin Agarwal from Motilal Oswal asked about the competitive intensity in the non-par savings business and margin trends. Vibha Padalkar MD said that given the upward trajectory, continued smooth upward curve on margin, it will continue to happen, no change in that. On competitive intensity, HDFCLIFE is finding more the mid-tier, apart from the listed players.