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HDFC Standard Life Insurance Company Ltd.

BSE: 540777 Sector: Financials
NSE: HDFCLIFE ISIN Code: INE795G01014
BSE 00:00 | 14 Aug 468.00 3.95
(0.85%)
OPEN

465.60

HIGH

471.00

LOW

464.10

NSE 00:00 | 14 Aug 468.10 4.00
(0.86%)
OPEN

464.10

HIGH

471.00

LOW

464.00

OPEN 465.60
PREVIOUS CLOSE 464.05
VOLUME 55644
52-Week high 547.25
52-Week low 307.65
P/E 80.27
Mkt Cap.(Rs cr) 94,228
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 465.60
CLOSE 464.05
VOLUME 55644
52-Week high 547.25
52-Week low 307.65
P/E 80.27
Mkt Cap.(Rs cr) 94,228
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

HDFC Standard Life Insurance Company Ltd. (HDFCLIFE) - Chairman Speech

Company chairman speech

Dear Shareholders

The financial year ending March 31 2017 has been an important year in the journey forHDFC Life. The Company continued to consolidate its position as a long-term player in theindustry with its focus on customer service stronger product propositions and improvedprofitability. During the year the Company also announced a potential merger with MaxLife Insurance Company with a view to increase the width of its distribution balance theproduct mix and to leverage the revenue and cost synergies between the two companies. Thebiggest leverage for the merged entity will come from employees of both thecompanies. The regulatory approvals for the proposed merger are awaited at this moment.

The macro-economic factors and demographics in India continue to support the growth oflife insurance business. However the competitive intensity remains high leading to"short-term" behaviour patterns by players that are value-eroding for theindustry. Your Company has continued to tread a path of profitable growth andcustomer-centricity in these times. New Business Margin (NBM) is a key indicator of thehealth of any life insurance business. The Company had a healthy NBM of 21.6% during theyear and its NBM continued to be among the best in industry. The Company registered agrowth of 19% in the overall premium while Indian GAAP profits grew at 9% over last year.The Company maintained a steady growth rate of 9% over last year in the Individualbusiness (WRP). The Company has been at the forefront of technology adoption and turningitself into a digital insurer. Multiple initiatives in these areas have led to morestraight through processing faster customer response times and automation of processes.All of these have led to the Embedded Value (EV) of the Company growing at a healthy rateof 21% over last year.

Financial services sector in India has seen rapid changes during the last year. Thepace of digital adoption by Banks NBFCs and Insurers has accelerated quite significantly.Newer players like payment banks digital wallets and FinTech companies are introducinginnovative models for customer acquisition and service. While it is early days for themtheir approach is nudging the traditional players to rethink their processes and businessmodels. Further the one-time exercise by the Government of India in November 2016 to phaseout currency bills of Rs. 500 and Rs. 1000 and replace them with newer bills(commonly referred to as demonetisation) has increased digital adoption significantlyduring the year. The Government's continued efforts in increasing the usage of JanDhan accounts Aadhaar and Mobile ("JAM Trinity") is also broadening thebase for financial participation and reducing the costs to reach new and unserved customersegments.

These positive changes open up new possibilities for HDFC Life. Building an agilemulti-distribution platform was one of the key strategic themes chosen by the Company aspart of its strategic planning exercise last year. The Company is building an ecosystem ofalliance partners spread across Banks NBFCs Small Finance Banks Payment Banks andEcommerce aggregators and integrating with their technology platforms to acquire andservice customers. The distribution platform provides a frictionless paperless customeronboarding experience through these partners and also allows the Company to innovate onpre-approved offers auto form fill-up and a choice of product options on the go. TheCompany has also invested in mobility solutions for its workforce that has improved fieldforce productivity rationalised branch infrastructure and increased servicing options forcustomers. The Company has multiple ongoing programmes that use Artifficial Intelligence(AI) mobility and analytics to strengthen its digital proposition. I believe the Companyhas made investments in the digital space ahead of the curve and it is poised to takeadvantage of the larger trend of digitisation in the Indian economy.

While digital distribution is a key part of its future the Company has continued tobuild its physical distribution network. The traditional channels of BancassuranceAgency Direct and Brokers have seen profitable growth during the year. The Company alsodefined a new Agency model during the year that will be rolled out in FY 2018. Thismodel will have a greater focus on agent training productivity and providing newer toolsto agents to acquire and serve more customers.

The Direct channel (excluding online) also saw a healthy 29% growth during theyear.

Apart from the financial metrics the Company has also improved on various‘quality of business' metrics that it tracks including customer complaintspersistency employee attrition and claim settlement ratio. Employee engagement index hasalso increased over the last year on the back of employee-centric initiativesundertaken by the Company.

The two subsidiaries of HDFC Life - ‘HDFC International Life and Re CompanyLimited' (HILRCL) and HDFC Pension Management Company performed well during the year. HILRCLstarted its operations in FY 2016 and has steadily made its presence felt in theGCC markets. HDFC Pension has in a short span crossed Rs. 1163 Crs of Assets UnderManagement. With the Government's focus on deepening pension penetration in India HDFCPension has strong future prospects. Both the subsidiaries are platforms that will providefuture growth opportunities for your Company.

The prospects of India's life insurance market remain positive with a strong GDP growthrate increasing levels of financial savings and initiatives undertaken by the Governmentof India to ensure adequate social security for its citizens. The market will remaincompetitive with newer players and intermediaries entering the fray. Your Company remainsfocussed on its objectives of profitable growth providing an agilemulti-distribution platform and delivering long-term value to the consumers through lifeinsurance products. I would like to thank all the shareholders for another year of supportand trust reposed in the Company.

Deepak S. Parekh

Chairman