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Amitabh Chaudhry, MD and CEO of HDFC Life

India Infoline Research Team / 13:56 , May 08, 2013

Amitabh Chaudhry, MD and CEO of HDFC Life completed his Engineering in 1985 from Birla Institute of Technology and Science, Pilani. Before joining HDFC Standard Life, he was the MD and CEO of Infosys BPO and was also heading an Independent Validation Services unit in Infosys Technologies. He started his career with Bank of America delivering diverse roles ranging from Head of Technology Investment Banking for Asia, Regional Finance Head for Wholesale Banking and Global Markets and Chief Finance Officer of Bank of America (India). He moved to Credit Lyonnais Securities in 2001 in Singapore where he headed their investment banking franchise for South East Asia and structured finance practice for Asia before joining Infosys BPO in 2005.

Established in 2000, HDFC Life is India’s leading long-term insurance solutions provider offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings, Investment, and Health. The company also offers Women’s Plans to meet specific needs of women. Customers have the added advantage of customizing plans, by adding optional benefits called riders, at a nominal price. The company currently has 32 retail and 10 group products in its portfolio, along with 10 riders.

HDFC Life continues to have the widest reach with about 500 branches in India touching customers in over 900 cities and towns. The company has also established a liaison office in Dubai. The company has a strong presence in its existing markets with a strong base of Financial Consultants.

Yash Ved of IIFL provides you the highlights of a conference call where Amitabh Chaudhry says “FY14 will be tough for the insurance industry due to political uncertainties and product-related guidelines.”

Brief us about your financials?

HDFC Life has registered a profit of Rs 451 crore in FY13. The company recorded 16% positive growth in new business premium income (Individual business), a respectable 20% growth in Group business, and 11% growth in total premium income.

The company posted positive growth for new business premium income of 16% to Rs 3,113 crore from Rs. 2,695 crore in 2011-12.

The company achieved a tangible decline in expense ratio to 10.8%.Operating expense ratio was kept under control through various strategic initiatives.

The company has maintained a balanced product mix with ULIPs contributing 61% and conventional business forming 39% of the APE (Annual Premium Equivalent) in the Individual business.

The company is focusing on channels, products and customer-oriented initiatives along with well-defined premium reminder process have helped in maintaining the conservation ratio at 78%.

What is your market share?

We have garnered market share of 17.5% (a gain of 200 basis points over previous year) in Individual business (private industry) in terms of Weighted Received Premia (WRP);

Comment on your performance for FY2012-2013?

2012-13 was one more year of the company consistently outperforming the industry growth rates in new business premium, reducing its operating expenses ratio, growing both individual & group premium, increasing renewals and improving new business margins.

We have taken several steps to improve customer centricity, having rolled out a point-of-sale underwriting system ‘Click2Buy’.
We have also embarked upon a large technology-enabled transformation program that will make us more responsive to meeting customer and distributor needs.

We continue to sell a balanced, profitable product mix and our speed to market has improved considerably as evidenced by ours being the first re-launched ULIP pension product to hit the market.

We continued to grow our key channel partners, diversified our distribution mix and augmented our human capital during the year. Along with growth in our business, we will continue to work towards strengthening our risk management practices.

Despite focus on efficiencies, HDFC Life made significant investments in new channels, technology, branch refurbishments and international business, to position for growth in future.

What is your outlook for insurance industry for FY14?

FY14 will be tough for the insurance industry due to political uncertainties and product-related guidelines. The company is expecting better than industry growth this year.

What are your international plans?

We are planning to expand business in Gulf countries.

What are your IPO plans?

The company will take a decision on IPO process, when market stabilizes.