HDFC Life Insurance Company Limited , one of India's leading private life insurers, has reaffirmed its growth projections and strategic outlook in its recent financial disclosure. The company has maintained its previous guidance from Q1, anticipating growth in the 'early teens' while aiming to outperform the industry.

Growth Projections and GST Impact

HDFC Life expects to deliver normal Value of New Business (VNB) by FY27, after adjusting for the effects of recent GST changes. The company's outlook does not factor in potential benefits from these GST modifications, suggesting a conservative approach to financial forecasting.

Financial Performance

The insurer's financial results for the quarter and half-year ended September 30 reveal a steady performance:

Market Position and Product Mix

HDFC Life has strengthened its market position, with its individual weighted received premium (WRP) market share increasing to 16.6% in H1 FY26 from 16.3% in H1 FY25. The company maintains a balanced product portfolio:

Operational Metrics

The company reported improvements in several key operational areas:

• Persistency Ratio: The 13th-month persistency stood at 86%, while the 61st-month persistency improved to 62%.
• Solvency Ratio: At 175%, the solvency ratio remains well above the regulatory requirement, despite a slight decrease from 181% in H1 FY25.
• Expense Ratio: The total expense ratio (including commission) to total premium increased marginally to 21.6% from 21.1% in H1 FY25.

Strategic Initiatives

HDFC Life continues to focus on expanding its distribution network and enhancing its digital capabilities. The company's agency force grew to 2.58 lakh agents, with a gross addition of over 51,000 agents in H1 FY26.

Management Commentary

Vibha Padalkar, Managing Director & CEO of HDFC Life, commented on the results: "The recent GST revisions are a constructive structural shift aimed at simplifying compliance and improving affordability. We have ensured that the full benefits of the GST exemption are passed on to our customers. With product pricing now more attractive to customers across segments, we expect to see stronger demand over the medium to long term."

She added, "As the external environment evolves, we remain confident of the long-term growth potential of life insurance in India. With a resilient business model, a trusted brand, and a history of disciplined growth through cycles, we believe HDFC Life is well-positioned to grow faster than the industry."

HDFC Life's maintained guidance and strategic focus on balanced growth reflect the company's confidence in its business model and the broader insurance market in India. As the sector navigates regulatory changes and evolving consumer needs, HDFC Life appears poised to capitalize on emerging opportunities while maintaining its strong market position.

HDFC Life Insurance Company has released its financial results for the second quarter and first half, showing growth in profit and premium income. The company's board has also approved a significant fundraising initiative through non-convertible debentures.

Financial Performance

HDFC Life demonstrated resilience in its financial performance for Q2:

For the first half, the company reported:

Additionally, HDFC Life reported the following key metrics:

• Value of New Business (VNB): ₹10.1 billion, up from ₹9.38 billion year-over-year, exceeding estimates of ₹9.9 billion.
• Annualized Premium Equivalent (APE): ₹41.9 billion, compared to ₹38.58 billion in the previous year, slightly above the estimated ₹41.76 billion.
• New Business Premium: ₹89.5 billion, up from ₹80.97 billion year-over-year, though falling short of the estimated ₹90.6 billion.

Key Developments

Fundraising Approval

The Board granted in-principle approval for raising funds up to ₹750 crore through the issuance of Non-Convertible Debentures (NCDs) on a private placement basis.

Financial Indicators

• Solvency Ratio: As of September 30, HDFC Life's solvency ratio stands at 175%.
• Equity Allotment: The company allotted 13,92,511 equity shares pursuant to employee stock option exercises.
• Debt Redemption: HDFC Life redeemed ₹600 crore worth of subordinated debentures in the quarter.

Analysis

The Q2 results reflect HDFC Life's continued growth trajectory, with notable increases in both profit after tax and net premium income. The 13.32% year-on-year growth in net premium income suggests strong market demand for the company's insurance products.

The decision to raise funds through NCDs indicates that HDFC Life is positioning itself for potential expansion or capital strengthening. This move, coupled with the healthy solvency ratio of 175%, underscores the company's focus on maintaining a robust financial foundation.

The redemption of ₹600 crore in subordinated debentures, alongside the approval for a new NCD issuance, points to active management of the company's debt structure, potentially optimizing its capital costs.

The company's Value of New Business (VNB) growth of 7.7% year-over-year demonstrates HDFC Life's ability to generate value from its new business, while the increase in Annualized Premium Equivalent (APE) indicates strong sales performance.

These results demonstrate HDFC Life's ability to grow its business and maintain financial stability in the competitive insurance market.