At HDFC Life, we believe that to become the insurer of choice, we need to stay ahead of
the curve. Over the years, HDFC Life has successfully implemented a profitable and
consistent growth strategy resulting in a smooth upward curve on key metrics.
Dear Shareholders,
FY 2022-23 was a difficult year for the global economy. The slowdown in growth,
tightening of financial conditions in most regions and the subsequent stress saw the
collapse of some large financial institutions. Many central banks hiked policy rates to
combat inflation.
In this difficult environment, India has demonstrated sustained resilience. Economic
activity remained buoyant, with high frequency indicators such as credit growth, Goods
& Services Tax, e-way bills, rail freight traffic and air passenger traffic, amongst
others continued to strengthen during the year.
The Indian Life Insurance sector is also undergoing several changes. The insurance
regulator, IRDAI, embarked on a path to reform the sector to increase insurance
penetration and achieve the vision of insurance for all by 2047. The regulator introduced
the Use & File regime to launch products in order to increase speed to market. IRDAI
also revised the Expenses of Management (EoM) and Commission guidelines to provide more
operating freedom to insurers to manage their costs, encourage development of long-term
products and promote higher persistency thus creating longterm value for customers. The
grant of composite licenses, enabling distribution of other financial products by insurers
and the setting-up of an insurtech subsidiary is also under discussion. The management
team as well as the shareholders at HDFC Life are aligned with the regulator's vision and
will focus our energies to make use of the reforms to penetrate deeper.
At HDFC Life, we believe that to become the insurer of choice, we need to stay ahead of
the curve. Over the years, HDFC Life has successfully implemented a profitable and
consistent growth strategy with a smooth upward curve on key metrics. We have expanded our
distribution footprint, organically and inorganically, expanded our agent base and
increased collaboration with partners, to help tap multiple growth opportunities. Further,
our balanced product mix and customer- first strategy helps us to offer innovative
insurance plans suited to our customers' needs. Our tech- enabled platforms empower our
employees and associates to provide superior service.
We have successfully completed a first-of-its-kind merger in the Indian life insurance
industry by acquiring and integrating with the erstwhile Exide Life Insurance.
A testament to our profitable growth strategy is yet another year of robust business
performance. The Company recorded a 27%* growth year-on-year based on Individual WRP
(weighted received premium), with a market share of 16.5% and 10.8% in the private and
overall sector respectively, thus ranking amongst the top three players in the industry.
Our AUM stood at Rs.2.4 lakh crore. Our embedded value stood at Rs.39,527 crore as on
March 31, 2023, with an operating return on embedded value of 19.7% for FY 2022-23. Our
solvency ratio was healthy at 203% as on March 31, 2023. The Board has recommended a final
dividend of Rs.1.90 per share, translating to a dividend payout of ~30% which is in line
with our dividend payout ratios since FY 2016-17.
Further, we covered over 6.8 crore lives in FY 2022-23 and our overall claim settlement
ratio (individual and group) was at 99.7%, a testimony of our objective to provide
financial protection to society and our commitment to customers.
Recently, pursuant to the impending merger between HDFC Bank and HDFC Limited, RBI has
permitted HDFC Limited/HDFC Bank to increase its shareholding in HDFC Life to more than
50% prior to the effective date, thus clearing any uncertainty around HDFC Bank's eventual
shareholding in the Company. We should expect deeper engagement within the Group entities
leading to greater cross-sell opportunities and long-term value creation for all
stakeholders.
As I conclude, I would take the opportunity to thank all the stakeholders for their
commitment to the cause of financially protecting our nation and their faith in us. I also
want to express my gratitude to the regulator for their continued support.
The life insurance penetration in India is still in low single digits. Therefore, we
believe that the long-term growth story for the life insurance sector remains intact and
our focus remains on catering to the diverse needs of our customer base, while delivering
sustainable profitable growth.
Deepak S. Parekh
Chairman.