The promoters of HDFC Standard Life, the joint venture between HDFC and UK-based Standard Life, will invest Rs 300-350 crore in the company this financial year.
“We will need more capital to fund new business growth. We have also increased back-ended charge products in our portfolio,” said Vibha Padalkar chief financial officer, HDFC Standard Life.
During 2008-09, the promoters infused Rs 170 crore into the insurance business.
The fifth-largest private insurer plans to increase its new business premium income by 20-25 per cent this financial year. It aims to grow the total income by 17-20 per cent. With this kind of growth, the insurer aims to be among the top three. It is looking to increase its share of traditional business to 25 per cent from 20 per cent at present.
It reported a net loss of Rs 280 crore last financial year against a loss of Rs 500 crore in 2008-09. Driven by a check on cost and focus on productivity, it managed to bring down its expense ratio from 29.2 per cent in 2008-09 to 19.7 per cent in 2009-10.
The market consistent embedded value (MCEV- method followed by life insurers to value the company) stood at Rs 3,380 crore at the end of March 2010 as compared to Rs 2,710 crore in the previous year. The paid-up capital was Rs 1,970 crore.
During 2009-10, the company’s total premium grew 25.9 per cent to Rs 7,000-crore.
While Housing Development Finance Corporation (HDFC) Chairman Deepak Parekh on Wednesday said promoters would consider an initial public offering of HDFC Standard Life next year, the company was readying itself for the public offer.
“We are striving to be ready for an IPO as soon as we can and all efforts are being made, such as having corporate governance guidelines, a very strong board function and very strong reporting accountability,” she said.
The company is yet to decide whether money will be raised through dilution of promoters’ equity or a fresh issue. On meeting the September 1 deadline for new product guidelines, Padalkar said the insurer wanted the regulator to push this deadline to November 1.
The insurance regulator has come up with new norms on unit-linked insurance plans and asked insurers to comply with the revised norms by September 1, 2010.
