HDFC Life Q4 profit slips 15% to Rs 312 cr

HDFC Life Insurance on Monday reported 15 per cent decline in standalone net profit at Rs 311.71 crore for March quarter of 2019-20, due to the impact of the COVID-19 crisis.

It had registered a profit of Rs 364.01 crore in the same quarter of 2018-19.

Total income declined sharply to Rs 418.64 crore during the fourth quarter of the last fiscal from Rs 14,375.06 crore in the year-ago period.

During the latest quarter, the income from investment saw an erosion of a massive Rs 10,229.92 crore due to weak market conditions triggered by the coronavirus pandemic.

However, net premium collection witnessed marginal increase to Rs 10,464.46 crore, compared with Rs 10,247.50 crore in the year-ago quarter.

As a result of this pandemic, human lives have been disrupted and organizations around the world are witnessing challenging times, HDFC Life Insurance Managing Director and Chief Executive Officer Vibha Padalkar said in a statement.

We continue to deliver growth higher than industry and register steady performance across all key metrics. We believe that insurance remains a multi-decade opportunity with significant potential. The opportunities across mortality, morbidity and longevity remain large in our country," she said.

Customer-centricity, product innovation, a diversified distribution network, and technological capabilities are key pillars of the company's strategy and enablers to provide a sustainable value proposition to the customers, partners and shareholders, she added.

For the entire fiscal, the standalone net profit remained almost flat at Rs 1,295 crore.

The company's embedded value (EV) increased 13 per cent to Rs 20,650 crore at the end of March 2020, it said.

The EV is similar to the book value of companies in other sectors. It is sum of the company's net worth and the present value of all future profits to shareholders from the existing book of the company, including new business written in the year.

Solvency margin of the company also stood at 184 per cent at the end of March 2020 as against 188 per cent in March 2019.

"As on March 31, our AUM is Rs 1.3 lakh crore (Debt:Equity mix - 71:29; more than 96 per cent debt investments are in G-Secs and AAA bonds as on March 31, 2020." it said.

Value of new business (VNB) rose 25 per cent to Rs 1,919 crore in last fiscal, as against Rs 1,537 crore in 2018-19.

VNB is used to measure profitability of the new business written in a period. It is the current value of all future profits to shareholders measured at the time of writing of the new business contract.