HDFC Life's Q3 FY25 results: Net profit rises 13.6% to Rs 414.9 crore

The value of new business (VNB) rose 8.6 per cent YoY to Rs 930 crore in Q3 FY25, compared to Rs 856 crore in the same period last year

 

Private sector life insurer HDFC Life on Wednesday reported a 13.65 per cent year-on-year (Y-o-Y) rise in net profit to Rs 414.9 crore in the 2024-25 (FY25) October-December quarter (Q3), driven by healthy persistency and a growing back book.

 

Its value of new business (VNB) rose by 8.6 per cent Y-o-Y to Rs 930 crore in Q3, compared to Rs 856 crore in the year-ago period.

 

VNB is the present value of all future profits to shareholders, measured at the time of writing the new business contract. 

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The insurer’s VNB margin, a measure of profitability, rose to 26.06 per cent, compared to 26.8 per cent last year. However, the margin improved from 24.3 per cent in the second quarter of FY25 due to the repricing of products.

 

“We have repriced and also looked at many product features that have given us inherent margins about 100 basis points higher,” said Vibha Padalkar, managing director and chief executive officer of HDFC Life.

 

The company’s new business premiums grew by 10.8 per cent Y-o-Y to Rs 7,899 crore in Q3, compared to Rs 7,130 crore in the year-ago period. The net commission of the life insurer rose by over 50 per cent Y-o-Y to Rs 1,932.48 crore in the reported quarter, while income from investments witnessed a 98 per cent drop to Rs 192.09 crore.

 

Its annualised premium equivalent (APE) was up 11.8 per cent Y-o-Y to Rs 3,569 crore.

 

APE is the sum of annualised first-year regular premiums and 10 per cent weighted single premiums and single premium topups.

 

In Q3FY25, the solvency ratio of HDFC Life stood at 188 per cent, compared to 190 per cent in the year-ago period, as it wrote more new business.

 

The persistency ratio of the insurer in the April-December period (nine months/9M of FY25) for the 13th month stood at 87 per cent, compared to 86 per cent in 9M of 2023-24. Meanwhile, the 61st-month persistency ratio was 61 per cent in the quarter under review, compared to 54 per cent in the year-ago period.

 

“We expect to grow by leveraging multiple drivers, including a strengthened market position at HDFC Bank, capitalising on ongoing investments such as branch expansion and new tieups, continuing to scale up a high-quality proprietary business led by agency, and favourable macroeconomic shifts,” Padalkar said.