discl - invested.
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discl - invested
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ICICI Prudential Life Insurance Co. saw the biggest sequential decline at 50% in new business premium in the quarter ended June, followed by SBI Life Insurance Co. and HDFC Life Insurance Co.'s 46% and 43% fall, respectively.
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SBI Lifeās growth was led by higher proportion of market-linked plans or Ulips compared with ICICI Pru Life that has a higher proportion of annuity and protection products. HDFC Life, in its earnings call, said its balanced product mix with credit protect and annuity business registered growth.
Source:
Read more at: How Second Wave Hurt ICICI Pru, SBI Life And HDFC Life In Q1
disc: invested
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It is not correct to look at sequential growth is Insurance business, even more so Q4 vs Q1. This is because, in Q4 of any year, there will be huge spike due to demand for these products in order to avail tax benefits for that financial year. So, its better to compare YoY
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HDFC Life going to buy Exide Life, after the deal a 100% subsidary and subsequently to me merged with HDFC Life.
Exide Life to add ~40% in topline going forward.
Source - https://www.bseindia.com/xml-data/corpfiling/AttachLive/6d39f86a-c233-4140-8aa2-3830fafa991a.pdf
HDFC Life To Acquire Exide Life Insurance For Rs 6,687 Crore
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I think 40% addition is not to overall topline, but to the agency led business of HDFC Life. So its significant to Agency side and hence management mentioned its complimenting their existing business model. Pls correct me if wrong
Yes I believe itās agency top line only
How to understand market reaction giving thumps up to Exide and down to HDFC Life?
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The valuation HDFC gave to Exide Insurance business under this deal was a bit high, so it was more in favor of exide then to HDFC, to be precise market was expecting valuations at 25-29 per share but real valuation given was quite high approx 80. Still HDFC will get big benefit from this deal in long run as insurance business in India is still in growing stage, we may see more such consolidation happening in this business just like we are seeing in mutual fund business.
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Just a small addition, due to better entry barriers, gestation time & diligence required for setting up a profitable Insurance business, unlike AMC business, new entrants would be much lesser. So with Consolidation and lesser new entrants, Big will become Bigger and with every challenge, Better managed will become Betterā¦
Disc: Invested, biased. I maybe wrong in my assessment. Not a buy/sell recommendation
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Initially this deal didnāt look very good (payment in form of our equity) for our business but management shines the light that they got a business that had very similar synergies to ours and was already turning profitable(despite small size) unlike several unicorns . This will increase their reach in several regions and hopefully, turning exide DNA to ours wonāt take too much effort.
Again thanks to Neeraj for his questioning and analysis.
ttps://www.youtube.com/watch?v=XQr408qyMa4 (add h in front of link)
Disc: Invested
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I got this on my mail account. Many of the start up offering insurances it that threat to HDFC Life?
For example. Navi Insurance By Former Co-Founder of FlipKart(https://www.naviinsurance.com/)
Acko (Health Insurance Plans: Buy Medical Insurance Policy Online)
Partnerships(Source: Acko General Insurance - Wikipedia)
- Acko General Insurance partnered with Ola cabs and launched an in-trip insurance program in more than 110 cities in India.[12][13]
- Acko General Insurance partnered with Amazon India to provide mobile insurance plans on the retailerās website.[14]
- Acko General Insurance partnered with HDB Financial Services and offer HDBFS customers insurance covers at no additional cost with EMI cards.[15]
- In July 2020, Amazon Pay partnered with Acko to provide its customers auto insurance policy.[16][17]
While watching Mumbai Diaries on Amazon Prime I saw Star Health Insurance on one of the scene.
Competitor Alert!
I am newbie here suggestion are welcome. trying to learn from most of valuable folks on this forum.
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I liked the details of competitors you mention inspite of being a newbie. Also, the fact that you observed Star insurance while watching an Amazon prime show means you think of businesses even when you are not actively thinking about them. Its a good sign I would say.
Coming back to business, these all competitors you mentioned are primarily health insurance providers. Some start ups are in partnership with established health insurance providers like for eg the Ola one you mentioned is in partnership with Cigna, which is a health insurance giant in US. HDFC Life operates in Life Insurance space.
Having said above, competition and disruption is a way of life, a way of business and no sector, no company can be immune to it. You need to see how a particular business responds to such competition and/or disruption and invest in a firm which you trust will emerge stronger with every such challenge.
Life Insurance is a very long term game. Even General insurance for that matter. Sooner than later, underwriting skills, risk management and right product mix would kick in than the disruptions caused by any start ups in this space. A single jolt is capable of bankrupting even the most established firms, if proper risk management is not in place.
As an investor in this space, I would worry more on my company having the most stringent underwriting skills and risk management practices, right product mixes, ethical selling, interest rate effects etc. than on start up disruptions.
Insurance cannot be treated as a normal consumer selling item to be sold at ecommerce sites meant for selling FMCG or at stores meant for selling ACsā¦you can certainly sell your product there to first time buyers and win decent business in a highly populated consumer economy of the world but eventually to become a real insurance company, you have to work the traditional or even digitally traditional way to get the real customers who actually need insurance, who understand what they are buying and who buy the right product with right valueā¦and the highly focused, ethical, best managed, sticking to basics with right products firm has a clear right to win this long term game than a firm which intends to disruptā¦
Disc: Above views are purely personal and no buy/sell recommendation. Invested & highly biased. I can be completely wrong in my assessments
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Adding to this, general(health) insurance and life insurance are different games. One needs to buy health/vehicle insurance every year and one can try startups. But people buy life insurance which has a time horizon of 20-50 years. In such scenario it is difficult for people to trust new brands. LIC/SBI/HDFC/ICICI should continue to dominate.
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discl - invested in hdfc life
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20210905_HDFC-life-Insurance-Company-limited_204_CompanyUpdate.pdf (757.8 KB)
Motilal Oswal - Neutral on HDFC LIFE.
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Agree, but mistakes lie in the eye of beholder. For some, Zomato is still fairly valued. It can be oneās mistake or otherās inability to see the capabilitiesā¦be it in Zomato or any other company.
What is the correct valuation of HDFC Life Insurance or even Zomato, no one in this forum would know and not even top analysts that is why they all want to be part of such stories in ratios each is comfortable with.
I will delete this post in some time
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The company earned a net premium of Rs 11,445.5 crore, a 52% rise over the preceding quarter.
Growth in new business premium was aided by a healthy uptick in annuity or participating insurance policies.
Renewal premiums contributed around 44%.
Revenue rose 52% sequentially to Rs 20,478.5 crore.
Operating income rose 1% sequentially to Rs 278.1 crore.
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There are some key ratios only applicable to life insurance businesses. I have made a compiler of the same along with background, formula and meaning.
You can spot these ratios easily in thier annual financial statements (mandatorily to reported: IRDA rule), Quarterly results and investors presentation.
Having a understanding of these ratios would surely help in gauging the performance of the business.
Here it goes -
Would love views and inputs on the same!!
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