Private life insurer HDFC Life Insurance on Tuesday reported a six per cent rise in standalone profit after tax to Rs 451 crore for the first quarter ended June 30.
The company had posted a net profit of Rs 425 crore in the same period previous fiscal.
"We have maintained our performance across key metrics despite the prevalent scenario and are seeing encouraging signs on the ground," its managing director and CEO Vibha Padalkar told reporters.
During April-June period, its total premium declined 10 per cent to Rs 5,863 crore from Rs 6,536 crore in the year-ago period.
New business premium fell 33 per cent to Rs 2,623 crore in the quarter from Rs 3,926 crore. Renewal premium rose 24 per cent to Rs 3,239 crore as against Rs 2,610 crore in the same period a year ago.
Total annualised premium equivalent (APE) was down 10 per cent to Rs 1,198 crore compared to Rs 1,710 crore in the previous year.
The company's embedded value increased 17 per cent to Rs 22,580 crore at the end of June 2020 compared to Rs 19,230 crore in the year-ago period.
The company assessed the investment position as on June 30, 2020 and made adequate impairment provisions to the extent necessary. It had made a provision of Rs 41 crore as of 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 reserve was not utilised in the previous quarter, we believe that it is prudent for us to continue to carry it forward," it said.
Solvency margin of the company also stood at 190 per cent at the end of June 2020 as against 193 per cent in June 2019.
The life insurer received 41 individual COVID-related claims till date and, of which, valid claims are 39, Padalkar said.
It continues to maintain a balanced product mix with share of participating savings, non-participating savings, ULIPs, protection and annuity accounting for 30 per cent, 28 per cent, 27 per cent, 11 per cent and 5 per cent of individual APE (annual premium equivalent), respectively.
"Our calibrated approach of maintaining a balanced product mix has again enabled us to manoeuvre through a turbulent environment and adapt faster than the overall market," Padalkar said.
As the situation begins to normalise, she expects life insurance to emerge as an important avenue for both protection as well as long-term savings, and consequently help attract a higher quantum of inflows from Indian households.
"We remain upbeat about the medium to long term prospects of our business and continue to focus on our strategy to build a sustainable and profitable business thereby adding value to all our key stakeholders," she added.
The company's scrip ended 1.60 per cent up at Rs 627 apiece on BSE on Tuesday
