HDFC Life Insurance said on Wednesday its sales through parent HDFC Bank have begun recovering after losing market share to rival insurers in the lender’s branches, as competition eased.
HDFC Life’s share of insurance policies sold through HDFC Bank had come under pressure over the past year as rival insurers offered cheaper policies, intensifying competition in its branch network after regulators pushed banks to offer customers a wider choice of insurers.
Competitive pressures and “irrational” pricing eased, HDFC Life said on Wednesday, with the share of sales from HDFC Bank recovering near to the levels seen a year earlier, even as overall business through that channel remained subdued.
“Our market share within HDFC Bank has now come back, and as the bank grows, we are very confident of getting good growth from HDFC Bank,” said Vineet Arora, executive director and chief business officer.
HDFC Life expects to grow at least in line with the industry in fiscal 2027, it said, without providing further details.
The company expects to maintain its value of new business (VNB) margin, or the expected profit from new policies sold, at around 25%. The margin remained steady at 25% in the June quarter, allaying concerns over profitability after last year’s tax changes removed a tax benefit for insurers.
HDFC Life reported a 12% rise in first-quarter profit, helped by strong policy renewals, while its bank distribution channel accounted for 57% of total sales.
However, annualised premium equivalent (APE), a key measure of new business, rose 9%, slower than the 12.5% growth a year earlier, before the firm faced intense competition in sales via the parent bank.
Value of new business also rose 9% in the first quarter.
Earlier in the day, peer ICICI Prudential Life Insurance reported a 14.6% increase in APE.
