HDFC Life, one of India's leading life insurers reported a 33% drop in its net profit to Rs 3,020 million for the quarter ended June 30, 2021 as against Rs 4,510 million in the same period a year ago. The massive fall in profit was on the back of higher claims reserving towards heightened claims intimation expected in the second and third quarter of the fiscal.

The private sector life insurer reported a 31% growth in total premium to Rs 76,560 million in the first quarter of the fiscal from Rs 58,630 million a year ago.

Total APE surged by 30% to Rs 15,610 million in the first quarter of the fiscal as against Rs 11,980 million a year ago.

HDFC Life's assets under management saw a healthy growth of 30% in the June quarter to Rs 1.81 lakh crore.

Vibha Padalkar, MD & CEO said, "Against the backdrop of disruption in business on account of localised lockdowns, and surge in cases during the second wave, we recorded 22% growth and market share of 17.8% in private sector in terms of Individual WRP. We clocked 40% growth in terms of value of new business and we achieved a New Business Margin of 26.2% in Q1. Our product mix continues to remain balanced and our annuity business witnessed strong growth of 61% in this quarter.

In comparison to Q1 of last fiscal, the Company clocked higher renewal collections, with 13th month persistency improving from 87% to 90%.In the quarter gone by, we witnessed a steep rise in death claims, with peak claims in wave 2 at around 3-4 times of the peak claim volumes in the first wave. We paid over 70,000 claims in Q1. The gross and net claims provided for amounted to Rs. 15,980 million and Rs. 9,560 million respectively. Based on our current claims experience, we have set up an additional reserve of Rs. 7 billion to service the claims intimations expected to be received. Our endeavour is to promptly settle every bonafide claim. 

The strength of our balance sheet and back book surplus has enabled us to absorb the shock of heightened claims, whilst continuing to deliver growth. With signs of the second wave receding, over the past month, we have seen a gradual pick-up in economic activity, across parts of the country. We see greater customer engagement and an increased interest in life insurance policies."

Shares of the company declined Rs 19.35, or 2.77%, to settle  at  Rs 678.60.  The total volume of shares traded  was  421,155 at  the BSE (Monday).