Private sector life insurance company HDFC Life has recently announced its highest-ever bonus of ₹3,660 crore for participating policy plans. This bonus will benefit a total of 23.14 lakh policyholders.
Out of the total bonus amount, approximately ₹2,696 crore will be payable during this financial year. Policyholders will receive this bonus either on maturing policies or as cash bonuses. The remaining bonus amount will be paid out in the future upon policy cessation, which includes maturity, death claims, or surrender pay-outs.
Vibha Padalkar, the Managing Director and CEO of HDFC Life, expressed her views on this development. She stated, “As a life insurer, we cater to four key risks of mortality, morbidity, longevity, and interest rate through our innovative products and services that enable individuals to live a ‘Life of Pride’.” Padalkar further added, “We are pleased to announce an increase in the bonus declared for our valued policyholders. This is our way of rewarding the loyalty of our policyholders as we continue to do our part to secure India financially.”
The bonus is applicable to participating or par plans, which are life insurance policies that provide profit-sharing benefits in the form of bonuses. Such policies allow policyholders to share in the investment surplus and include popular plans like HDFC Life Guaranteed Insurance Income Plan and HDFC Life Sanchay Par Advantage.
According to a research note by Kotak Institutional Equities dated May 16th, HDFC Life reported a 7% growth in individual Annualized Premium Equivalent (APE), 6% growth in overall APE, and gained a market share of 90 basis points year-on-year, reaching 10.4% in the individual business segment. The note also mentioned that the momentum at HDFC Bank and growth in other channels are the likely drivers behind this performance. In terms of four-year Compound Annual Growth Rate (CAGR), HDFC Life witnessed a 12% increase in April 2023, slightly below the industry’s growth rate of 13%.
Considering these positive indicators, the brokerage firm has recommended a ‘Buy’ on HDFC Life’s share price with a target price of ₹725 per share.
On Wednesday, HDFC Life’s share price traded at ₹557.70 per share on the Bombay Stock Exchange (BSE), showing a marginal decline compared to the previous figure of ₹559.45 per share. The stock’s intraday trade ranged from ₹562.45 per share to ₹552.50 per share. Over the past month, HDFC Life’s share price has observed a growth of at least 4.5% on the BSE.
HDFC Life is a joint venture between HDFC Ltd., India’s leading housing finance institution, and abrdn (Mauritius Holdings) 2006 Limited, a global investment company.
As a prominent listed life insurance solutions provider in India, HDFC Life offers a comprehensive portfolio of over 60 products, including individual and group insurance solutions. These offerings cater to various customer needs, such as Protection, Pension, Savings, Investment, Annuity, and Health. Additionally, HDFC Life provides optional riders to further enhance the coverage according to specific requirements.