HDFC Life Insurance Company Ltd Management Discussions

A. Macroeconomic Trends

2024 was billed as the year of elections, with a significant number of large economies, including India, going through their respective election cycles. The political environment in India continued to be stable with the ruling coalition returning to power, though with a reduced majority.

In India, the extended period of election campaigning, voting, results and Government formation led to a sharp dip in Government activity in the first two quarters of the year. The summer season, during the same period also saw heatwaves across large parts of the country. The two factors led to a sharp dip in economic activity with Q1 and Q2 GDP growth dipping to 6.7% and 5.6% respectively. The slowdown in this period marked the end of the post-Covid rebound in activity. Over the remainder of the year, GDP growth did pick up from the lows, taking the full year FY 2024-25 GDP growth estimates to 6.50% versus 9.20% for the previous year.

The slowdown in growth led to a softening of inflation, especially core inflation. Food prices, though, stayed volatile through the initial part of the year on the back of climactic disturbances – heatwaves and monsoon dislocations. Food prices eased off in the latter half of the year, bringing the trajectory of inflation in line to meet RBIs target levels of 4.00% inflation.

The slower growth in the initial part of the year, also led to a trimming of corporate earnings estimates. At the revised earnings levels, equity valuations were deemed to be expensive, which triggered large outflows from equity FPIs during the latter half of the year. FPI outflows peaked in November, exceeding USD 11bn. The large FPI outflows kept the Indian currency under pressure, and RBI desisted from easing monetary policy despite the favourable domestic developments. It was only towards the end of the year, that the currency pressures abated, and RBI eased both – interest rates and liquidity.

The bond markets saw a steady easing of yields, though with some volatility during the year. The pace of softening of yields picked up towards the end of the year, once RBIs policy actions turned decisively softer. The benchmark 10-year yield eased to 6.58%, by the end of the year, from 7.05% at the end of the previous year.

Equity markets had a mixed year, with the initial half seeing strong gains due to continued momentum from the previous year, ably supported by strong domestic institutional flows. However, over the latter half of the year, the markets gave up almost all the gains, as the concerns on valuations, and tepid earnings growth expectations, triggered large FPI outflows. The large cap and the small cap indices ended the year about 5.3% higher, while the Mid-cap indices did slightly better with gains of about 7.5%.

While India saw policy continuity post elections, the economic policies of the United States saw a sea change.

From the day of assuming office, the new US President, Donald Trump, has sought to make radical changes in the global economic order. The US President aims to eliminate the large trade deficits, that the US runs with the rest of the world, through imposition of punitive tariffs on imports into the US, with the expectation that the tariffs would bring production back to the US. The steep tariffs for imports into the US, which has the largest consumption base in the world, with frequent changes in the rates and the applicability conditions, have led to huge uncertainty in trade flows across all economies. The sudden disruption of the trade flows is expected to cause a dip in global economic activity, with the impact across different countries determined by the extent of trade activity in their overall GDP. The uncertainty is unlikely to abate soon. The tariff levels between countries will be subject to protracted negotiations stretching over months, if not longer, and the subsequent re-structuring of manufacturing and trade flows could keep volatility across asset classes elevated.

While India has a relatively low proportion of net exports in its GDP, thus being relatively better off, compared to the more export-oriented economies, the outlook remains uncertain, as the subsequent second order effects of trade re-routing and manufacturing relocations could affect Indian economy adversely. This uncertainty is expected to keep asset market volatility elevated over the near term.

Outlook on the Life Insurance Industry in India

Indias life insurance sector is poised for significant growth, driven by rising financial security needs among the expanding middle class and younger demographic. The life insurance sector demonstrated steady momentum during the year, outperforming several other sectors within the Nifty 50; a reflection of its inherent resilience and growing role as a trusted pillar of long-term financial planning.

Improved accessibility via banks, agents, brokers, aggregators, and digital platforms has further reinforced the industrys growth. With a long-term growth trajectory, life insurance remains a multi-decade opportunity.

Key Opportunities

I. Growing workforce and burgeoning middle-class

Source: United Nations World Populations Prospects Report, CRISIL "The big shift in financialisation" report 2022

Note: E and P represent Estimated and Projected respectively

India being the worlds most populous country, is also one of its youngest, with a median age of around 28 years. As per United Nations population projections, the working-age cohort (15-64 years) in India comprises approximately 97 crore individuals, accounting for 68% of the nations population. Further, approximately 25% of the incremental global workforce over the next decade will come from India. Consequently, India holds considerable potential to benefit from its demographic dividend.

The rise of middle-income households (with an annual income between Rs. 2 lakh and Rs. 10 lakh, as per CRISIL research) has been a defining trend. Their share has grown from around 16% in FY 2011-12 to 32% in FY 2021-22 and is projected to reach 47% by FY 2029-30, translating to nearly 18 crore households. This growth, particularly in rural and semi-urban areas, presents a significant economic opportunity. The aspirations and consumption patterns in tier-2 and tier-3 cities are increasingly aligning with those in tier-1 cities, signalling a broader shift in household prosperity.

Financial inclusion and economic expansion beyond metro areas are evident in deposit trends. The share of deposits from regions outside the top 200 districts rose from 25% in March 2015 to 30% in March 2020, reflecting growing affluence in new customer segments and geographies. Additionally, the consumer base aged 15-55 years in tier-2 and tier-3 cities has reached around 14 crore, nearly matching that of tier-1 cities. Increased household incomes and a rising number of graduates and postgraduates are key drivers of this demand surge.

The life insurance sector plays a crucial role in channelling long-term savings while offering protection, income security, and annuity solutions. By 2030, over 100 crore individuals will fall within the insurable age bracket of 20 to 64 years, reinforcing the demand for savings and protection products. With a growing middle class, an expanding workforce, and enhanced financial literacy, insurance penetration is set to rise, driven by greater awareness and improved access to financial services.

1. Swiss Re. Indias protection gap is as of CY22

2. Jefferies "Composite Insurance License in India: Taking a Leaf from Global Experience" report 2022

3. Kotak institutional equities

India remains significantly underinsured compared to developed economies, both in terms of penetration as well as density. The country has one of the highest protection gaps globally at 91% and penetration in India stands at just 2.8%, amongst the lowest in developing and comparable markets, highlighting substantial growth potential. Additionally, sum assured as a percentage of GDP remains among the lowest in emerging economies, underscoring the need for greater protection.

The evolution of protection in India has been shaped by consumer preferences, regulatory framework, and economic shifts. Given the countrys diverse demographic and economic landscape, different regions exhibit varying levels of affluence and approaches to insurance adoption. The life insurance sector can tap into these opportunities by offering tailored solutions that align with customer needs, leveraging multiple distribution channels and hybrid platforms.

Indias economic growth further reinforces the potential for insurance expansion. India recorded the highest five-year average GDP growth rate amongst large economies, with per capita income crossing the $2,000 threshold in 2021—an inflection point that typically marks a shift from subsistence spending to discretionary investments. Despite global uncertainties, Indias economy has remained resilient, achieving an estimated growth close to 6.5% in FY 2024-25 and outperforming other major economies. According to Swiss Re, life insurance premiums in India are expected to grow at 9% annually (in real currency terms) over the next decade, positioning the country as the worlds fifth-largest life insurance market. India is set to be the fastest-growing insurance market among G20 nations.

A favourable macroeconomic environment, rising awareness of life insurance, increasing financial savings, urbanization, and accelerating digital adoption are all expected to drive sustained demand for life insurance. Additionally, growing credit penetration presents an opportunity for expanding credit life insurance solutions.

III. Increasing life expectancy and lack of proper retirement planning

Source: World Bank DataBank (2020), Swiss Re: A Retirement lifeline (2023), Milliman Asia Retirement Report 2017, NSSO, MoSPI, UN World Populations Prospects Report (2022) 1. Pension assets / funds

2. Retirement savings gap = Desired retirement income (i.e. 70% of pre-retirement annual income) - Actual income (i.e. social security benefits + employer benefits + personal savings)

Shifting demographics, increasing life expectancy, and limited social security have made post-retirement financial security a concern in India. The proportion of the elderly population is expected to rise from the current 7% to nearly 17% by 2050, with a significant portion lacking coverage under formal social security schemes. Compared to global benchmarks, Indias pension market remains significantly underpenetrated at just 9% of GDP.

This presents a significant opportunity for insurers to offer long-term income and annuity products that align with customers financial goals and risk appetites. Additionally, the governments push for National Pension System (NPS) solutions further enhances the growth potential for annuity products. We remain optimistic about this segment and expect strong growth momentum in the coming years.

Source: Motilal Oswal Financial Savings Update Sep ‘23, RBI Annual Report, Invest India, Morgan Stanley: India Equity Strategy Playbook

In the long run, rising personal disposable incomes are expected to drive higher household savings, which will be allocated across various financial instruments, including life insurance. While the share of life insurance as a percentage of GDP has remained largely stable over the past decade, its role in financial planning continues to grow.

Government initiatives aimed at promoting financial inclusion—such as the establishment of small finance banks, payments banks, and the introduction of low-cost insurance schemes—have contributed to greater insurance awareness. Flagship programs like the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which has provided affordable cover to millions of low-income individuals, exemplify this progress. In parallel, rising credit penetration is expected to drive greater demand for protection-oriented products, enabling households to better manage financial risks and vulnerabilities.

V. Digitisation

Rapid technological advancements are redefining how businesses operate, with both customers and distributors seeking seamless, end-to-end digital experiences. Technology and data have become indispensable—not only for elevating the customer journey but also for enabling sharper underwriting as life insurers tap into new segments and geographies.

Digital capabilities now play a pivotal role in acquiring new business, enhancing service delivery, streamlining claims processing, and reinforcing risk management. Today, ‘online is no longer just a distribution channel—it is embedded at the core of business operations. The pace of digital adoption has further accelerated in response to structural shifts such as the COVID-19 pandemic and demonetisation.

As customers and partners become increasingly digital-first, insurers must invest in robust technological infrastructure and agile platforms powered by data analytics, automation, and artificial intelligence. Seamless integration with partner ecosystems—ranging from bancassurance to fintech and health-tech—is critical to enabling scale and efficiency.

Moreover, the growing demand for personalised and intuitive service experiences is driving adoption of cloud computing, machine learning, and conversational bots, all of which support a more proactive, data-driven approach to customer engagement.

Risks and Concerns

The industry is exposed to risks stemming from changes in macroeconomic and regulatory landscapes and intense competition. Market fluctuations, changes in tax policies or interest rates, and disruptions in relationships with key distribution partners can impact financial performance and future growth prospects.

To address these challenges, we have a robust Enterprise Risk Management (ERM) framework that governs and manages all aspects of probable risks faced by the industry. A detailed overview of our ERM framework is available in the chapter on Enterprise Risk Management.

B. Life Insurance Industry Overview

I. Overview

The life insurance industry has witnessed substantial transformation over the past decade, marked by a steady increase in market share for private insurers in individual weighted received premium (WRP). This evolution has been driven by shifts in distribution and product offerings, with technology playing a pivotal enabling role.

Source: IRDAI and Life Insurance Council

During FY 2024-25, the industry recorded 5% growth in new business premiums, reaching Rs. 3,97,337 crores compared to Rs. 3,77,960 crores in FY 2023-24. The industry registered 10% growth based on individual weighted received premium (WRP) and 1% growth in group business. Private insurers achieved 10% growth in total new business premium, 15% growth in individual WRP, while group business grew by 5%. The market share of private players in the individual segment rose to 71%, an increase of nearly 3% over FY 2023-24. The growth can be attributed to the

II. Product Mix across Private Insurers1 expansion of distribution channels and ongoing product innovation. The share of private insurers in the individual segment has grown steadily from 52% in FY 2015-16 to 71% in FY 2024-25.

Based on data for FY 2024-25 from the Life Insurance Council the top 10 insurers accounted for 90% of the market (in terms of individual WRP). Distribution arrangements with large banks and development of proprietary channels have been key drivers of growth for most of the large insurers.

In recent years, private insurers have increasingly focused on the unit-linked segment within the individual business, driven by strong performance in equity markets. There is also a growing emphasis on both the retirement and protection segments, with the protection business experiencing strong growth. Several factors are driving this including embedded protection in savings plan, return of premium propositions, higher rider attachment and expansion of credit protect offerings.

Source:1. Based on Individual New business premia

The industry has undergone a gradual shift in its distribution strategy, with bancassurance becoming the primary channel, supported by a larger bank branch network and the increasing geographic reach of life insurance branches across Indian cities. This strategic evolution underscores the pivotal role of banks in life insurance proliferation. By leveraging their extensive network and large customer base, life insurers have increasingly extended financial security to a wider range of customers while also investing in their own proprietary channel to diversify growth opportunities.

As the business continues to expand, there remains substantial potential for increased policy penetration, particularly in Tier 2 and 3 locations where bank and agency channels are progressively extending their market presence. In recent years, the broker channel has grown significantly, supported by increased customer adoption of web aggregators and modern fintech distribution platforms. Direct distribution by insurers is outpacing other channels, supported by a strategic emphasis on scaling proprietary platforms to boost profitability.

C. How are we tracking business performance?

FY 2024-25 was a year where we deepened our reach, continued sharpening our value propositions and demonstrated the resilience of our business model. Moreover, aligning with our stated aspirations, we have nearly doubled all key metrics between FY 2021-25.

Our overall industry market share expanded by 70 bps to 11.1% and by 30 bps to 15.7% within the private sector. We continue to be on the forefront of product innovation, with several industry first launches during the year. HDFC Life remain committed to innovation whilst maintaining a disciplined approach to risk management.

All distribution channels delivered double-digit growth during the year. We also expanded our reach by onboarding approximately 40 new partners. Our focus remains on broadening our distribution footprint while continuously exploring newer, more efficient ways to connect with and serve our customers.

Excluding the Covid period, we have consistently delivered positive and range-bound operating variances over the past nine years—reflecting our strong fundamentals, disciplined execution, and prudent risk management. Project Inspire, our ongoing technology transformation initiative, continues to progress well, with new digital assets being deployed in a phased manner through the year.

As we step into our 25th year, we remain focused on sustaining momentum within a stable regulatory environment. Our aspiration is to consistently outpace industry topline growth, drive Value of New Business (VNB) in line with Annualised Premium Equivalent (APE) growth, and double key performance metrics every 4 to 4.5 years.

# What we track	Comments
1 a) Embedded value (EV): Sum of adjusted net asset value and the present value of future profits of a firm	Embedded Value (EV) has consistently grown, doubling over four years, accompanied by a stable operating return on EV.
b) Value of New Business (VNB): Determines the expected profitability of the new business written during the year	Despite regulatory shifts and sustained customer preference for ULIPs, we have maintained stable margins. Going forward, our focus remains on scaling core metrics and delivering consistent VNB growth, reinforcing our emphasis on long-term profitability and business resilience.
c) New Business Margins (NBM): Determines profitability margin of the new business written during the year
2 Persistency: Strength and quality of existing book	Strong persistency across cohorts, driven by a focus on business quality, customer- centric product offerings, and the use of technology to deliver a superior customer experience.
3 Assets under Management (AUM): Growth and net accretion to deliver healthy growth with balanced mix	Assets Under Management (AUM) have shown sustained growth over the past several years.
	Debt: Equity mix stood at 69:31. 98% of debt investments are in Government bonds and AAA rated securities as on March 31, 2025.
4 Distribution mix: Develop and nurture each channel, while ensuring business diversification	Our diversified distribution network includes over 41,000 partnership branches, supported by a robust pan- India presence with more than 650 branches and an agent workforce of over 2.4 lakhs.
5 Product mix: Balanced product mix with options for different risk reward profiles	Our strategic priorities are anchored in need-based selling, continuous product innovation, and delivering consistent, profitable growth.
6 Drive to increase protection: Higher focus on protection business across individual and group segments	Our retail protection APE registered healthy growth of 25% in FY 2024-25 and retail sum assured increased by 18% YoY and by 32% based on 2 year CAGR. We continue to outpace the industry over a two-year horizon and maintain our leadership in overall sum assured.
7 Market share and ranking: Maintained market leadership with sustained growth across segments	Outpaced the private industry over multiple timeframes including, in the past 3, 5 and 7 years, thereby consistently demonstrating growth leadership.
8 No. of policies:Number of individual policies sold per financial year	We have shifted our focus on broadening the spectrum of our customers and increasing the number of policies sold. Our policy count grew faster than the overall and private sector during FY 2024-25.

D. Standalone Performance Overview

FY 2024-25 was a year where the Company deepened its reach, continued sharpening its value propositions and demonstrated the resilience of its business model. HDFC Life delivered a healthy growth of 17% in individual WRP during FY 2024-25, outperforming both the private and the overall sector. The Companys overall industry market share expanded by 70 bps to 11.1% and by 30 bps to 15.7% within the private sector based on individual WRP. Embedded Value grew to Rs. 55,423 crore, with an operating RoEV of 16.7%. Profit after tax (PAT) grew by 15% to Rs. 1,802 crore, driven by strong growth of 18% in back book profits. Renewal collections grew by 13% YoY. Persistency metrics strengthened further, with 13th and 61st month at 87% and 63% respectively. We saw consistent improvement in 13th month persistency across customer cohorts and geographies, despite the expansion of our footprint into newer segments and markets.

We have consistently delivered positive and range-bound operating variance over the past nine years (excluding Covid), underscoring prudent risk management, disciplined execution and strong fundamentals. As we step into our 25th year of operations, our focus remains clear - to build a future-ready life insurer that grows sustainably, serves responsibly and innovates purposefully.

I. Our Business Segments: Lines of Business:

We offer long-term savings, protection and retirement or pension products to Individual and Group customers. These products are grouped under three segments Participating (Par), Non-Participating (Non-Par) and Unit-Linked (ULIP). A brief description of each product segment is set below:

1. Non-Linked segments:

Non-linked segment comprises the traditional products that offer reasonable insulation from market related risks. The non-linked segment is split into par and non-par segments.

a) Non-Linked Participating segment:

This segment covers insurance contracts that participate in the surplus generated from the segment, during the term of the contract. The policyholder is entitled to 8/9th of the surplus generated from this segment, which is added to the policy as bonuses. The shareholders share of surplus is 1/9th of the bonus declared for the policyholders. The balance surplus, if any, in the segment is accumulated under the head ‘Funds for future appropriation in the balance sheet for future distribution to policyholders and shareholders.

b) Non-Linked Non-Participating segment: This segment covers insurance contracts, which do not participate in the surplus generated from the segment. The surplus arising from this segment is transferred to Shareholders Profit & Loss Account on recommendation by the Appointed Actuary of the Company.

2. Unit Linked segment:

This segment covers insurance contracts that are investment cum protection plans that provide returns directly linked to the market performance of the underlying fund. The investment risk is borne by the policyholder. The surplus arising from this segment is transferred to Shareholders Profit & Loss Account on recommendation by the Appointed Actuary of the Company.

II. Performance of Standalone Financial

Statements:

The standalone results presented below includes detailed analysis across key financial parameters tracked by the Company.

A) Income statement analysis:

Gross premium income registered a steady growth of 13%, supported by consistent performance across both individual and group segments. Correspondingly, expenses of management increased in line with overall premium growth, driven by measured investments in expanding distribution and enhancing technology capabilities. The Profit after Tax (PAT) for the Company stood at Rs. 1,802 crore.

Income statement

Revenue and Profit and Loss Account	FY 2024-25	FY 2023-24	Growth
Gross Premium Income	71,045	63,076	13%
Reinsurance (net)	(1,429)	(1,117)	28%
Total Premium Income (Net)	69,616	61,959	12%
Income from Investments
Policyholders	25,945	38,354	-32%
Shareholders	1,125	1,002	12%
Total Income from Investments	27,070	39,356	-31%
Other Income
Policyholders	283	336	-16%
Shareholders	0	13	-99%
Total Income (A)	96,969	1,01,664	-5%
Less:
1. Expense of Management:
a. Commission	7,835	5,256	49%
b. Operating Expenses	6,235	6,930	-10%
2. GST on linked charges	489	412	19%
3. Interest on Non-convertible debentures	117	69	70%
4. Expenses towards CSR activities	11	23	-52%
5. Penalties	2	-	-
6. Other Provisions	95	(89)	-207%
7. Benefits and Change in Valuation:
a. Benefits Paid	39,346	39,696	-1%
b. Change in Valuation Reserves (net)	41,516	48,419	-14%
c. Change in funds for future appropriations	46	(24)	-292%
Total Expenses (B)	95,692	1,00,692	-5%
Provision for tax:
Policyholders	(588)	(592)	-1%
Shareholders	64	(5)	-1380%
Provision for tax (C)	(524)	(597)	-12%
Profit after tax (A-B-C)	1,802	1,569	15%

i. Premium earned: ( in Crore)

The following table sets forth summary of premium income at segment level for the periods indicated:

Particulars	FY 2024-25				FY 2023-24
	Par	Non-Par	Linked	Total	Par	Non-Par	Linked	Total	Growth
New Business Premium (NBP)	2,568	21,076	9,721	33,365	2,648	20,768	6,215	29,631	13%
Individual	2,568	8,334	5,984	16,886	2,648	7,672	4,363	14,683	15%
Group	-	12,742	3,737	16,479	-	13,096	1,852	14,948	10%
NBP growth (%) as compared to Previous Year	-3%	1%	56%	13%	-13%	-7%	73%	2%
Renewal Premium	11,449	16,210	10,021	37,680	10,824	14,102	8,519	33,445	13%
Individual	11,449	15,904	10,021	37,374	10,824	13,810	8,519	33,153	13%
Group	-	306	-	306	-	292	-	292	5%
Gross written Premium	14,017	37,286	19,742	71,045	13,472	34,870	14,734	63,076	13%
Less: Reinsurance ceded	(17)	(1,360)	(52)	(1,429)	(35)	(1,056)	(26)	(1,117)	28%
Net premium	14,000	35,926	19,690	69,616	13,437	33,814	14,708	61,959	12%

Summary of premium income at segment level:

Gross written premium increased by 13% from Rs. 63,076 crore in FY 2023-24 to Rs. 71,045 crore in FY 2024-25. Thisgrowthwasprimarilydrivenbyourcontinuedfocus on addressing customer needs through a diverse, innovative product suite and a robust multi-channel distribution strategy. Our portfolio now includes 45 retail and 16 group products, complemented by 13 riders, catering to savings, investment, protection, and retirement goals. During the year, we added 12.67 lakh new retail individual policies.

a) Individual New Business Premium:

Individual new business premium grew by 15% from Rs. 14,683 crore in FY 2023-24 to Rs. 16,886 crore in FY 2024-25. The Unit Linked segment registered a robust 37% year-on-year growth, despite market volatility, reflecting a notable shift in customer preference and sustained demand for market-linked products.

b) Group New Business Premium:

Group new business premium grew by 10% from Rs. 14,948 crores in FY 2023-24 to Rs. 16,479 crores in FY 2024-25. The growth was largely led by growth in Group fund business.

c) Renewal Premium:

Renewal premium recorded a healthy growth of 13%, increasing from Rs. 33,445 crore in FY 2023–24 to Rs. 37,680 crore in FY 2024–25. This was supported by strong persistency and an expanding back book of business.

Distribution channel mix

A strong distribution network forms the backbone of our multi-channel strategy, enabling us to effectively reach and serve diverse customer segments. Our channels have remained agile, responding to evolving market dynamics while continuing to deliver value through innovative products, enhanced service quality, and digital enablement.

Bancassurance grew by 18% year-on-year, led by an increased counter share at HDFC Bank. The agency channel also delivered a robust 15% growth, supported by capacity building efforts, including the addition of 29,000 agents and 117 new branches during the year.

Our Direct channel focuses on upselling and cross-selling to existing customers through a seamless digital platform that simplifies the journey from onboarding to policy issuance.

The Broker channel, comprising brokers, corporate agents, IMFs and web aggregators is our third-largest contributor to new business APE. It continues to play a pivotal role in expanding our market presence and supporting long-term growth.

ii. Reinsurance ceded

The Company collaborates with the reinsurers to share underwritten risk. The reinsurance premium ceded increased from Rs. 1,117 crore in FY 2023-24 to

Rs. 1,429 crore in FY 2024-25. The increase is largely due to business being ceded in Group Credit Protect (GCP) segments during the year.

iii. Income from Investments

The following table sets forth, for the periods indicated, summary of income from investments:

Particulars	FY 2024-25					FY 2023-24
	Policyholders Shareholders
	Par	Non-Par	Linked	Total	Policyholders	Par	Non-Par	Linked	Shareholders	Total
Interest Income	2,915	6,273	1,353	981	11,522	2,816	4,975	1,236	860	9,887
Dividend Income	292	32	801	35	1,160	212	8	735	28	983
Profit on sale / redemption of investments	1,192	232	11,112	160	12,696	836	177	9,656	190	10,859
(Loss on sale / redemption of investments)	(109)	(250)	(559)	(14)	(932)	(59)	(243)	(353)	(18)	(673)
Transfer / gain on revaluation / change in fair value	17	169	(4,332)	-	(4,146)	(12)	(77)	12,617	-	12,528
Amortisation of premium/ discount on investments	843	5,631	333	(37)	6,770	709	4,732	388	(58)	5,771
Total income from Investments	5,150	12,087	8,708	1,125	27,070	4,502	9,572	24,279	1,002	39,355

a) Policyholders:

Non-Linked Segments (Par and Non-Par):

Interest and amortisation income from the participating and non-participating segments increased from Rs. 13,232 crore in FY 2023–24 to Rs. 15,662 crore in FY 2024–25, driven by higher assets under management (AUM), supported by strong renewal premium inflows. Dividend income rose to Rs. 324 crore from

Rs. 220 crore in the previous year, aided by increased equity AUM and higher dividend payouts by investee companies. Net profit on sale of investment/redemption of investments increased from Rs. 711 crore in FY 2023-24 to

Rs. 1,065 crore in FY 2024-25, on account of higher realization on sale of investment assets.

Unit linked segment:

Investment income in the Unit Linked segment declined from Rs. 24,279 crore in FY 2023–24 to

Rs. 8,708 crore in FY 2024–25, primarily due to a sharp reduction in mark-to-market gains. This was driven by subdued equity market performance, with the BSE Sensex rising just 5% compared to 25% in the previous year, and the BSE 100 increasing 5.5% versus 32% in FY 2023–24.

The dip in equity returns led to lower fair value changes and marginal realised gains from investment sales. However, this was partially offset by gains in the debt portfolio, as the 10-year G-Sec yield declined by 47 basis points, compared to a 26-bps fall in the previous year.

It is important to note that investment income in the Unit Linked segment is offset by a corresponding increase in actuarial reserves, and therefore has no impact on the profit or loss for the year.

b) Shareholders:

Interest and amortisation income in the shareholders account rose from Rs. 802 crore in FY

2023–24 to Rs. 944 crore in FY 2024–25, driven by the expansion of the fixed income portfolio in line with growth in shareholders AUM.

Net profit from the sale and redemption of investments declined from Rs. 172 crore to Rs. 146 crore, reflecting lower realisations amid relatively subdued equity market performance during the year.

Time Weighted Rate of Return (TWRR) for policyholders and shareholders accounts are given in detail below:

Particulars	FY 2024-25	FY 2023-24
Investments:
Policyholders Investments	3,17,895	2,77,338
Shareholders Investments	18,386	14,882
A. Without Unrealised Gains/Losses
Shareholders Funds	7.22%	7.02%
Policyholders Funds
- Non-Linked
a) Participating	8.23%	8.09%
b) Non-Participating	9.69%	9.86%
- Linked - Non-Participating	17.73%	17.24%
B. With Unrealised Gains/Losses
Shareholders Funds	8.94%	11.19%
Policyholders Funds
- Non-Linked
a) Participating	8.91%	14.39%
b) Non-Participating	10.80%	12.05%
- Linked - Non-Participating	7.86%	30.29%

In FY 2024–25, Time-Weighted Rate of Return (TWRR) excluding unrealised gains/losses increased for Non-Linked Participating, Linked Non-Participating policyholders, and the shareholders account—driven by proportionately higher profit realisation from investment sales.

Conversely, TWRR (excluding unrealised gains/ losses) for the Non-Linked Non-Participating policyholders saw a marginal decline due to relatively lower profit realisation.

TWRR including unrealised gains/losses declined across both policyholder and shareholders accounts, primarily due to muted equity market performance during the year. This was partially offset by a positive fair value change in the debt portfolio, as the 10-year G-Sec yield fell by 47 basis points, compared to a 26-bps decline in FY 2023–24.>

iv. Other income:

Other income mainly comprises interest on policy loans, revival fees, and income on unclaimed amount of policyholders amongst others. The interest income on policy loan increased from Rs. 166 crore in FY 2023-24 to Rs. 204 crore in FY 2024-25, on the back of increasing loan book. Further, FY 2023-24 included interest income on income tax refund accounted for Rs. 49 crore. v. Commission:

The summary of commission expense is as follows:

Particulars	FY 2024-25				FY 2023-24
	First year	Single	Renewal	Total	First year	Single	Renewal	Total
Premium	12,976	20,389	37,680	71,045	11,110	18,521	33,445	63,076
Commission	5,860	1,385	590	7,835	3,151	1,583	522	5,256
Commission % of premium	45.2%	6.8%	1.6%	11.0%	28.4%	8.5%	1.6%	8.3%

Commission expenses are primarily influenced by the product type, distribution channel, premium payment term, and performance-linked incentives for distributors. Accordingly, any shift in the mix of these variables can impact overall commission payouts.

The total commission increased from Rs. 5,256 crore in FY 2023-24 to Rs. 7,835 crore in FY 2024-25 in line with the Board approved Commission and Remuneration Policy and in accordance with the IRDAI (Expenses of Management, including Commission of Insurers) Regulations, 2024.

vi. Operating Expenses

The following table sets forth, for the periods indicated, summary of operating expenses:

Particulars	FY 2024-25	FY 2023-24	Growth %
Employees remuneration & welfare benefits	3,198	3,257	-2%
Advertisement and publicity	1,042	1,769	-41%
Business development expenses	258	241	7%
Information technology expenses	335	263	28%
Others
- Other expenses	1,171	1,171	0%
- Volume Based	217	214	1%
Operating Expenses Policyholders (A)	6,222	6,915	-10%
Operating Expenses Shareholders (B)	26	37	-30%
Operating Expenses (A+B)	6,248	6,952	-10%
Interest on Non-convertible debentures	117	69	70%

a) Operating expenses under Policyholders Revenue account:

The total operating expenses decreased from

Rs. 6,953 crore in FY 2023-24 to Rs. 6,248 crore in FY 2024-25, thereby leading to a decrease in the ratio of operating expenses to total premium from 11.0% in FY 2023-24 to 8.8% in FY 2024-25. During the year the Company has continued to invest in new partnerships, talent, and technology to support long-term growth.

• Employee Remuneration:

Employee costs decreased year-on-year, primarily due to reduced reliance on outsourced manpower. This was partially offset by an increase in on-roll headcount, up by 4,738 as of March 2025, and annual salary increments.

• Advertisement and Publicity spends:

Marketing and branding expenses were lower, aligned with the planned cost rationalisation strategy for the year.

• Business Development Expenses:

These include costs related to events, contests, and engagement initiatives. The increase in spend corresponds with growth in new business volumes.

• Information technology expenses:

Higher technology expenses were driven by investments in product testing, application development, cloud-based projects, and deployment of digital assets, supporting ongoing digital transformation.

Expenses of Management (EOM) consists of Commission and Operating expenses of policyholders. Below is the comparison of EOM for current year vs previous year:

Particulars	FY 2024-25	FY 2023-24
Premium	71,045	63,077
Commission (A)	7,835	5,256
Operating Expense (B)	6,248	6,983
Total Expenses of Management (A+B)	14,083	12,239
Ratio of EOM to Premium	19.8%	19.4%

Overall, the EOM ratio as a percentage of Premium has increased from 19.4% in FY 2023-24 to 19.8% in FY 2024-25.

b) Operating expenses in Shareholders account:

• Expenses other than those directly related to insurance business decreased by 30% from Rs. 37 crore in FY 2023-24 to Rs. 26 crore in FY 2024-25 mainly due to calibrated spends on CSR in FY 2024-25 and one-off expense on integration of erstwhile Exide Life Insurance Company in FY 2023-24

• Interest expense on non-convertible debentures increased from Rs. 69 crore in FY 2023-24 to Rs. 117 crore in FY 2024-25 due to issuance of additional debt amounting to Rs. 2,000 crore during the year.

vii. Benefits paid:

The following table provides the summary of benefits paid:

Particulars	FY 2024-25				FY 2023-24
	Par	Non-Par	Linked	Total	Par	Non-Par	Linked	Total
Surrenders & Withdrawals	1,111	4,874	11,827	17,812	1,146	5,476	13,096	19,718
Maturity & Survival Benefits (incl. Annuity)	2,653	3,632	5,189	11,474	3,821	2,376	4,466	10,663
Protection Claims (Death, Health & Rider)	377	5,388	439	6,204	322	4,473	365	5,160
Discontinuance termination	-	-	1,929	1,929	-	-	2,235	2,235
Bonus	3,099	-	-	3,099	2,859	-	-	2,859
Total Benefits paid	7,240	13,894	19,384	40,518	8,148	12,325	20,162	40,635
Less: Reinsurance on claims	(21)	(1,109)	(43)	(1,174)	(17)	(893)	(29)	(940)
Net benefits paid	7,219	12,785	19,341	39,344	8,131	11,432	20,133	39,695

Benefits paid marginally reduced during the year from Rs. 39,695 crore in FY 2023-24 to Rs. 39,344 crore in FY 2024-25. Protection and maturity benefits increased during the year while payouts on surrenders, withdrawals and discontinuance decreased. The movement in benefits paid is explained in detail below:

a) Surrenders and Withdrawals:

Surrenders and withdrawals decreased from Rs. 19,718 crore in FY 2023-24 to Rs. 17,812 crore in FY 2024-25. The surrenders and withdrawals by individual policyholders decreased from Rs. 14,283 crore to Rs. 12,685 crore mainly on account of tepid performance of equity market during FY 2024-25. There is a marginal decrease in surrenders and withdrawals by group policyholders from Rs. 5,435 crore in FY 2023-24 to Rs. 5,127 crore in FY 2024-25.

b) Maturity and Survival Benefits (including Annuity):

Maturity and survival benefits increased from Rs. 10,663 crore in FY 2023-24 to Rs. 11,474 crore in FY 2024-25 in line with business written in the past.

c) Protection Claims (Death, Health & Rider):

The protection death claims increased from Rs. 5,160 crores in FY 2023-24 to Rs. 6,204 crore in FY 2024-25 with corresponding increase in reinsurance claims recovery from Rs. 940 crore in FY 2023-24 to Rs. 1,174 crores in FY 2024-25. Overall claim settlement ratio was 99.8% and the individual claim settlement ratio was 99.7%.

d) Bonus:

The interim bonus increased from Rs. 1,855 crore in FY 2023-24 to Rs. 2,435 crore in FY 2024-25, in line with the growth in corresponding business including cash bonus. The terminal bonus decreased from Rs. 1,004 crores in FY 2023-24 to

Rs. 664 crore in FY 2024-25 largely due to decrease in maturity claims during the year.

viii. Change in valuation of policy liabilities

The following table sets forth the summary of changes in valuation of policy liabilities:

Particulars	FY 2024-25	FY 2023-24
Gross: Policy liabilities (non- unit/ mathematical reserves)	37,236	32,857
Amount ceded in reinsurance	(1,807)	(778)
Amount accepted in Reinsurance	-	-
Fund reserve	5,629	16,731
Funds for discontinued policies	458	(391)
Change in valuation of liability in respect of life policies	41,516	48,419

Change in valuation reserves reflects change in the actuarial liability in respect of policies in force and for policies in respect of which premium has been discontinued but a liability still exists. The change in fund reserves includes the change in unit fund value of policyholders fund, under the unit linked segment.

During FY 2024-25, the movement in fund reserve reflects the unrealized gains due to mark to market movement in the unit linked portfolio along with any net change in liabilities due to premium receipt and any release due to benefits paid. The increase in change in reserves for the non-unit linked segment other than fund reserve reflects the increase due to new business and renewal premium collection after considering release of reserves on account of benefits paid.

ix. Provision for tax

FY 2024-25 saw a reversal of tax provision of prior periods amounting to Rs. 631 crore (Previous Year Rs. 770 crore), based on favorable orders received during the year. After removing the impacts of these reversals, the provision for tax amounts to Rs. 107 crore for FY 2024-25 and Rs. 173 crore in FY 2023-24.

x. Change in funds for future appropriation (FFA)

The FFA has remained relatively stable for the participating segment. There is an increase of

Rs. 14 crore in FFA for the Participating segment during FY 2024-25.

c) Financial Position/Balance Sheet analysis:

The following table sets forth, for the periods indicated, the financial position of the Company:

Particulars	As on March 31, 2025	As on March 31, 2024
Sources of funds
Shareholders funds	16,126	14,652
Borrowings	2,950	950
Policyholders funds	3,19,200	2,76,916
Funds for future appropriations	1,258	1,211
Total	3,39,534	2,93,729
Application of funds
Investments	3,36,282	2,92,220
Loans	2,378	1,897
Fixed Assets	601	416
Current Assets (i)	9,872	7,974
Current liabilities and provision (ii)	9,599	8,778
Net Current Assets (i-ii)	273	(804)
Total	3,39,534	2,93,729
Contingent liabilities	2,386	2,103

Sources of Funds i. Shareholders funds:

The breakup of capital and reserves is as follows:

Particulars	As on March 31, 2025	As on March 31, 2024
Share Capital	2,153	2,151
Share application money received pending allotment of shares	1	-
Reserves and Surplus	13,526	12,050
Credit / (Debit) Fair Value	446	451
Change Account
Shareholders fund (net worth)	16,126	14,652

Net worth increased from Rs. 14,652 crore as of March 31, 2024 to Rs. 16,126 crore, driven by higher profit transfers, partially offset by dividend payouts during the year.

Fair value change account represents the balance of unrealised gains/ loss on valuation of equity portfolio in the shareholders fund. Marginal decrease in fair value change in shareholders account from Rs. 451 crore at March 31, 2024 to Rs. 446 crore is mainly attributed to tepid performance of equity market during FY 2024-25

ii. Borrowings:

During the year, the Company issued two additional tranches of Non-Convertible Debentures (NCDs), each amounting to Rs. 1,000 crore, at interest rates of 8.05% and 8.10%, respectively. As a result, the total outstanding NCDs increased from Rs. 950 crore to Rs. 2,950 crore. These instruments are listed on the wholesale debt market segment of the National Stock Exchange of India Limited.

iii. Policyholders Funds

Policyholders funds comprise two components: non-linked liabilities, which represent actuarially determined obligations to policyholders with in-force policies as of March 31, 2025, and linked liabilities, which reflect the aggregated Net Asset Value (NAV) of various unit-linked funds.

The summary of Policyholders funds is as below:

Particulars	As on March 31, 2025	As on March 31, 2024
POLICYHOLDERS FUNDS:
Credit / (Debit) Fair Value	6,795	6,026
Change Account
Policy Liabilities	2,10,778	1,75,349
Provision for Linked liabilities	97,743	92,114
Funds for discontinued policies	3,885	3,427
Funds for future appropriations	1,258	1,211
Total Policyholders Funds	3,20,459	2,78,127

The increase in non-linked policy liabilities is in line with actuarial computed liability for existing inforce policies as on March 31, 2025, which includes net cash inflows generated from new and persistent policies. The provision for linked liability represents aggregation of net asset value of various unit link funds, including unrealized gains due to mark to market portfolio. Further the movement in fair value change in non-linked fund represents the impact of movement in capital markets.

Application of Funds iv. Investments

The graph below provides a summary of Assets under Management (AUM) of the Company:

Assets Under Management

The break-up of investments as on balance sheet dates is as follows:

Particulars	As on March 31, 2025	As on March 31, 2024	Growth %
Investments:
- Shareholders	18,386	14,881	24%
- Policyholders (Non-Linked)	2,16,267	1,81,797	19%
Assets held to cover Linked Liabilities	1,01,628	95,542	6%
Total	3,36,282	2,92,220	15%

a) Shareholders Investments:

Shareholders investments increased from Rs. 14,881 crore as on March 31, 2024 to Rs. 18,386 crore as on March 31, 2025, due to profit transfers net of dividend payout, realized investment income, and issuance of sub debt during the year.

b) Policyholders Investments including linked liabilities:

The Policyholders Investment including linked Policyholders fund increased by Rs. 40,556 crore. The increase in investment assets is in line with business growth, with an increase in Non-linked investments primarily on account of premium income growth and investment income accruals.

v. Loans against Policy:

Loans against policies (net of repayments) rose from Rs. 1,897 crore as of March 31, 2024 to Rs. 2,378 crore as of March 31, 2025, reflecting increased uptake by policyholders seeking liquidity while continuing to retain their insurance cover. These loans are secured and are charged prevailing rate of interest as per the terms of the policy loan contract. Such loans are disclosed net of the provision for standard assets, made in accordance with the applicable IRDAI Regulations.

vi. Current Assets:

The following table sets forth, for the periods indicated, summary of current assets:

Particulars	As on March 31, 2025	As on March 31, 2024
Advances
Prepayments	175	172
Advance tax paid	889	145
Goods and Services Tax Credits	83	41
Capital advances	18	15
Security deposits	145	101
Other advances	29	31
Other Assets
Income accrued on investments	3,236	2,856
Outstanding Premiums	1,388	1,172
Due from other entities carrying on insurance business (including reinsurers)	82	230
Due from subsidiaries/holding company	3	2
Investment sold awaiting settlement	44	30
Assets held for unclaimed amount of policyholders (including income)	27	299
Goods and Services Tax/ Service Tax Deposits	350	296
Derivative Assets	1,537	973
Others	96	82
Cash and Bank Balance	1,770	1,529
Total current assets	9,872	7,974

Key items of current assets and advances are:

a) Advance Tax Paid:

Advance tax payments rose to Rs. 889 crore in FY 2024–25 from Rs. 145 crore in FY 2023–24. This increase was primarily due to the reversal of tax provisions following favourable rulings from the Income Tax Department related to prior years, as well as the receipt of tax refunds during FY 2023–24.

b) Outstanding Premium:

Outstanding premiums increased due to a higher base of policies that remained within the 30-day grace period.

c) Accrued Investment Income:

Accrued income from investments rose, driven by an increase in fixed income debt securities.

d) Investments Sold Awaiting Settlement:

This represents investment sales executed on the last business day of the year, pending settlement in accordance with the standard market cycle.

e) Assets Held for Unclaimed Amounts:

These assets reflect investments held against liabilities for unclaimed policyholder amounts. The reduction is in line with a corresponding decline in unclaimed liabilities, following revised guidelines issued by IRDAI.

f) Derivative Assets in Policyholders Fund:

Derivative assets increased from Rs. 973 crore to Rs. 1,537 crore, accompanied by a rise in derivative margin from Rs. 759 crore to Rs. 1,325 crore. These changes were driven by fair value gains on underlying government bonds and a higher volume of fixed income derivative transactions. The 10-year G-Sec yield declined by 47 basis points during FY 2024–25, compared to a 26-bps drop in the previous year. The outstanding notional value of derivatives rose from Rs. 40,602 crore to Rs. 46,009 crore.

vii. Current Liabilities and Provisions:

The summary of current liabilities is as follows:

Particulars	As on March 31, 2025	As on March 31, 2024
Current liabilities
Agents Balances	1,294	941
Balances due to other insurance companies (including Reinsurers)	130	176
Due to subsidiaries/holding company	163	83
Premiums received in advance	50	60
Unallocated Premium	639	706
Sundry creditors	3,559	3,597
Claims Outstanding	1,141	1,153
Annuities Due	16	6
Unclaimed Amount of policyholders	27	299
Investments purchased - to be settled	115	129
Interest payable on debentures/ bonds	98	49
Payable to unit linked schemes	700	442
Margin Money on Derivative	1,325	759
Goods and Services Tax Liability	23	50
Others	204	217
Provisions
Provision for employee benefits	112	70
Provision for taxation	3	42
Total current liabilities and provisions	9,599	8,779

The key items of current liabilities & provisions are as below:

a) Agent Balances: Represent commissions payable to agents and intermediaries as of the balance sheet date. The increase aligns with overall business growth and corresponding commission accruals.

b) Amount Due to Subsidiary/Holding Company:

Primarily comprises name usage fees payable to the holding company, HDFC Bank Limited.

c) Unallocated Premium:

Refers to premiums received for policies pending issuance due to underwriting formalities or incomplete documentation.

d) Sundry Creditors: Include accruals and payables for various services such as employee costs, marketing expenses, operating overheads, and litigation provisions.

e) Claims Outstanding: Comprise claims that were intimated but not yet settled as on the reporting date.

f) Unclaimed Amounts:

The reduction reflects efforts made by the Company to trace and disburse funds to rightful policyholders, in line with revised IRDAI guidelines.

g) Others:

Include statutory dues such as tax deducted at source, proposal deposits, and unclaimed dividends.

h) Investments Purchased Awaiting Settlement:

Represent trades executed on the last business day of the financial year and pending settlement in line with market cycles.

i) Payable to Unit Linked Schemes:

Reflect business booked on the final day of the year under the Unit Linked segment. The increase is driven by higher transaction volumes on that day.

viii. Contingent liabilities:

The contingent liabilities are summarized in the table given below:

Particulars	As on March 31, 2025	As on March 31, 2024
Partly paid-up investments	583	455
Statutory demands and liabilities in dispute, not provided for	1,750	1,600
Claims against policies not acknowledged as debts by the Company (net of reinsurance)	52	47
Others	1	1
Total	2,386	2,103

• Contingent liability for partly paid-up investments increased primarily due to additional investment in partly paid-up assets, negated by the call payment on such investments during the year.

• There is an increase in "Statutory demands and liabilities in dispute, not provided for" whichrelatestotheshowcausecumdemand notices/assessment orders received by the Company from tax authorities. Refer to the explanatory note 1 of Schedule 16(B) i.e., notes forming part of the financial statements.

d) Cash Flow Statement:

The following table sets forth, for the periods indicated, a summary of the cash flows:

Particulars	FY 2024-25	FY 2023-24
Net cash generated from operating activities	15,598	10,725
Net cash generated used in investing activities	(13,622)	(13,632)
Net cash generated from financing activities	1,607	(403)

i. Cash flow from operating activities:

Increase in cash flow from operating activities by Rs. 4,873 crore is primarily driven by premium received from policyholders net of payments towards benefits, commission and operating expenses.

ii. Cash flow from investing activities:

Cash flow from investing activities represents investment/redemption of funds in various securities such as government bonds, equity, corporate bonds/ paper, money market instruments and liquid mutual funds.

iii. Cash flow from financing activities:

The Company has issued sub-debt of Rs. 2,000 crore during the year. The Company paid dividend of Rs. 408 crore during FY 2023-24 and Rs. 430 crore in FY 2024-25.

III. Key Analytical Ratios: i. Profitability:

The following table sets forth, a break-up of underwriting profits into existing business surplus and new business strain and shareholders income over a period of three years:

Particulars	FY 2022-23	FY 2023-24	FY 2024-25
Underwriting Profit:
a) Existing business surplus	4,422	5,221	6,142
b) New business strain	(3,833)	(4,547)	(5,236)
Total (I)	589	674	906
Shareholders surplus (II)	771	895	896
Total (I+II)	1,360	1,569	1,802

1. The overall underwriting profits increased from

Rs. 674 crore in FY 2023-24 to Rs. 906 crore in FY 2024-25. Further, underwriting profits comprise of the below: a) Existing business surplus represents profits emerging during the year from business over the years. The surplus increased by 18% in the current year. b) New business strain increased in the year in line with the business growth along with the change in product mix observed through the year.

2. Shareholders income represents investment and other income arising on shareholders funds, net of expenses.

ii. Capital and Solvency Ratio:

The movement in net-worth from Rs. 14,652 crores as on March 31, 2024 to Rs. 16,126 crore as on March 31, 2025 is largely due to profit transfer, dividend payouts and ESOP allotments.

As against a regulatory minimum requirement of 150%, we have a solvency ratio of 194% as on March 31, 2025 as compared to 187% as on March 31, 2024. The increase in solvency ratio in FY 2024-25 is majorly on account of issuance of subordinated debt of Rs. 2,000 crores during the year. iii. Other ratios:

Particulars	FY 2024-25	FY 2023-24
Interest coverage ratio	18.65	28.43
Debt equity ratio	0.18	0.06
Current ratio	1.03	0.91
Return on net worth	0.12	0.11

• Interest coverage ratio is calculated as Profit before interest and tax divided by interest expense due. Tax for the purpose of this ratio includes tax of the Company reduced by tax pertaining to the participating segment. The reduction is on account of additional interest on debt raised during the year.

• Debt equity ratio is computed as Total borrowings divided by Equity. Equity is calculated as shareholders funds excluding redeemable preference shares, if any.

• Current ratio is computed as Current assets divided by Current Liabilities. Current Liabilities includes provisions.

• Return on net worth is calculated as profit after tax divided by average net worth as on the reporting date. The ratio remained stable during the period.

E. Performance of Subsidiary Companies

I. HDFC Pension Fund Management Limited

HDFC Pension Fund Management Limited (formerly "HDFC Pension Management Company Limited"), a wholly owned subsidiary of HDFC Life, began operations in August 2013. It has emerged as one of the fastest-growing Pension Fund Managers (PFMs) within the National Pension System (NPS) ecosystem, recording a strong 50% year-on-year growth in Assets Under Management (AUM) during FY 2024–25.

Key financial parameters have been highlighted below:

Particulars	FY 2024-25	FY 2023-24	Growth
Revenue	75.9	50.3	51%
Profit after Tax (PAT)	5.4	1.8	200%
Assets under Management (AUM)	1,15,627	76,955	50%
Market share	43.2%	43.3%	NA

As of March 31, 2025, HDFC Pension manages assets under management (AUM) to the tune of Rs. 1.15 lakh crore — a testament to its strong performance and growing market trust.

Expanding its footprint further, HDFC Pension began operating as a Point of Presence (PoP) in FY 2019-20, offering seamless NPS account openings across both retail and corporate segments.

In just six years, HDFC Pension has established itself as the largest PoP in terms of corporate relationships and corporate subscribers (excluding PoP employees). As of FY 2024-25, it proudly serves over 3,500 corporate clients and more than 4.5 lakh NPS customers — reflecting its growing leadership and unwavering commitment to helping India secure its retirement future.

II. HDFC International Life and Re Company

HDFC International Life & Re, a wholly-owned subsidiary of HDFC Life, has successfully completed nine years of operations since its incorporation in 2016 in the Dubai International Financial Centre (DIFC). As the first Life & Health (L&H) reinsurer incorporated in the DIFC and regulated by the Dubai Financial Services Authority (DFSA), the company has steadily expanded its presence across the Gulf Cooperation Council (GCC), the broader Middle East and North Africa (MENA) region, and select emerging markets. The company offers a comprehensive range of reinsurance solutions, including treaty reinsurance arrangements, facultative reinsurance arrangements and several innovative risk solutions.

In addition, to the DIFC headquarters of the Company, its overseas IFSC branch at GIFT City, which operates under the brand name "HDFC Life International" is fully operational and offers US dollar denominated life and health insurance products to both resident and non-resident Indians across the globe.

Key financial parameters have been highlighted below:

Particulars	FY 2024-25	FY 2023-24	Growth %
Revenue	34.1	24.4	40%
Profit after Tax (PAT)	0.4	0.3	22%

The company has demonstrated steady growth since its inception, with its Gross Written Premium (GWP) reaching USD 34 million in FY 2024-25, registering an 40% year-on-year growth.

Further, S&P Global Ratings assigned an Insurer Financial Strength Rating of "BBB" to HDFC International Life & Re for the seventh consecutive year. Apart from S&P Global Ratings, for the first time AM Best Ratings assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of "bbb" (Good) to HDFC International Life & Re.

F. Internal control systems and their adequacy

HDFC Life has established a robust and comprehensive internal audit framework, incorporating an independent review mechanism across all processes and systems. This framework ensures the reliability of financial reporting, provides timely feedback on operational and strategic goal achievement, and ensures compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function collaborates closely with other governance teams, integrating key insights from the risk management framework, compliance reports, and external auditor assessments. It also facilitates self-assessments to evaluate the adequacy and operational effectiveness of internal financial controls in line with the Sarbanes-Oxley (SOX) Act and the Companies Act.

Internal audits are conducted by an in-house Internal Audit (IA) team alongside a co-sourced external Chartered Accountant firm, operating under the oversight of the Audit Committee. Audit planning ensures comprehensive coverage of the companys information systems, business processes, and transactions across corporate and branch offices. Significant audit findings and follow-up actions are periodically reported to the Audit Committee and closely monitored to ensure effective resolution and implementation.

The Company has a robust Risk Management framework designed to proactively manage all material risks. This framework aligns the Companys strategy and business decisions with its risk appetite, encompassing financials, strategy, operations, fraud detection, data privacy, information security, business continuity, and emerging risks. It fosters a risk-intelligent culture across the organization. Key risks are continuously monitored, with statuses reported to the Risk Management Council, which includes the Executive Committee and key stakeholders. The Risk Management Council, in turn, reports to the Board Risk Management Committee (RMC). Quarterly, updates and mitigation plans (as necessary) for top corporate and emerging risks are presented to the RMC. The framework is detailed in the Risk Management section of the Annual Report.