Protection and savings products helped the insurer improve its profitability margin to 24.5%.
HDFC Life Insurance’s value of new business (VNB) margin remained within its guided range of 24% to 25% in the second quarter of fiscal year 2027, supported by growth in protection and non-participating savings products.
The insurer’s absolute VNB rose 15% year on year to $122.1m (INR11.6b) in the quarter, whilst its VNB margin increased to 24.5% from 24.1% a year earlier, according to Motilal Oswal Financial Services.
Annualised premium equivalent (APE) grew 13% to $498.1m (INR47.3b) in the quarter ended September 2026.
Individual APE rose 11%, whilst group APE increased 25%. For the first half of FY2027, APE grew 11% year on year.
Motilal Oswal expects HDFC Life’s growth to remain at 14% annually over FY 2026 to FY 2028, with VNB margin rising to 25.5% by FY 2028.
It attributed the expected improvement to a diversified product mix, higher sums assured and increased rider attachments.
The brokerage said margins would continue to benefit from scale and operating leverage as business volumes recover, although some of the gains are likely to be reinvested in improving business capabilities.
Distribution performance was mixed. Individual APE from the broker channel grew 26% year on year, whilst agency, direct and bancassurance channels recorded growth of 3%, 2% and 12%, respectively.
HDFC Bank contributed 48% of APE in the first half, supported by a recovery towards the end of the quarter.