HDFC Life Q1 results: Profit rises 6% at ₹451 crore
1 min read 21 Jul 2020, 04:45 PM ISTHDFC Life total premium declined by 10% to ₹5,863 crore during the quarter as compared with ₹6,536 crore in the year-ago period
PremiumNEW DELHI : HDFC Life Insurance on Tuesday reported 6% rise in standalone net profit at ₹451 crore for the first quarter of the current financial year.
The private sector life insurer posted a net profit of ₹425 crore in April-June, 2019-20.
However, total premium declined by 10% to ₹5,863 crore during the quarter as compared with ₹6,536 crore in the year-ago period, HDFC Life said in a statement.
During the latest quarter, first year premium collection also fell to ₹1,021.83 crore from ₹1,326.58 crore in the same period a year ago, indicating a slowdown in new business acquisition.
The company has assessed the investment position as at June-end and made adequate impairment provisions to the extent necessary, it said, adding, the company had made a provision of approximately ₹41 crore as on March 31, 2020, for potential adverse mortality experience due to COVID-19.
"The provision held is in excess of the IRDAI prescribed norms. While this COVID-19 reserve was not utilised in the previous quarter, we believe that it is prudent for us to continue to carry it forward," it said.
As the economy is coming to terms with the effects of the pandemic, the company is increasingly witnessing encouraging on-ground trends and business has started to pick up on a month-on-month basis, HDFC Life Managing Director and CEO Vibha Padalkar said.
"We are seeing higher traction, especially in the individual protection business.... We remain well positioned to provide a sustainable value proposition to our customers, partners and shareholders in these challenging times," she said.
The company's embedded value increased 17% to ₹22,580 crore at the end of June 2020, HDFC Life said.
The embedded value is similar to the book value of companies in other sectors. It is the 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 190% at the end of June 2020 as against 193 per cent in June 2019.
