HDFC Life Insurance Q4 Results Preview: Net profit likely to rise 13% on the back of double-digit premium income rise

HDFC Life Insurance Company Q4 FY24 Results Preview: HDFC Life Insurance Company is all set to report its financial results for the quarter as well as the year ended March 31, 2024, on Thursday, April 18. Analysts expect the private sector insurer to clock strong growth in new business premiums with robust numbers in the non-participating segment. 

According to Zee Business, HDFC Life Insurance Company is estimated to register a standalone net profit of Rs 405 crore for the fourth quarter of the financial year 2023-24, which translates into an increase of 12.8 per cent compared with the corresponding period a year ago. The analysts expect the life insurance provider's fourth-quarter net premium income to increase 15.4 per cent to Rs 22,434 crore.

The company's annual premium equivalent, a key metric used to compare the revenue potential of different types of policies, is estimated to come in at Rs 4,590 crore, down 11 per cent on a year-on-year basis, according to the research. 

Zee Business analysts peg the private insurer's value of new business (VNB) to decrease 19.2 per cent on a year-on-year basis to Rs 1,220 crore and its VNB margin to shrink by 90 basis points (bps) to 26.7 per cent.

Investors will keenly track the insurance company's growth outlook for the current financial year, which began on April 1, and any initiatives aimed at boosting its persistency ratio. 

The persistency ratio, another important metric, determines the proportion of renewal premium paying policyholders in total policyholders. Simply put, it tells how many policyholders are paying their premiums in a regular and timely manner.

HDFC Life's assets under management (AUM) are estimated to grow 24.3 per cent on a year-on-year basis to Rs 2.96 lakh crore, according to Zee Busines research.

The analysts peg the company's solvency ratio—which indicates an insurer's capability to meet its long-term financial obligations—to contract by 700 basis points to 196 per cent. The higher the solvency ratio the better the long-term health, and vice versa.