HDFC Life will launch two blockbuster products in Q3: Vibha Padalkar, MD & CEO

HDFC Life has grown by 38% on the half-yearly basis, says Vibha Padalkar, Managing director and CEO, HDFC Life. In an interview with Anurag Shah, Zee Business, Padalkar said, "HDFC Life will be launching two attractive products in the third quarter and it will be available on every channel". Edited Excerpts:

HDFC Life Insurance's net profit rose by around 7% year-on-year (YoY) in the September quarter (Q2) but the growth has not been as good as it was in the first quarter. Do you think that the overall macroeconomic situation is having an impact on the Life Insurance Companies as well?
That was not a reason for us because the first quarter was a blockbuster quarter as it was on the back of a product that was well received. And, you will agree that 68% growth in the first quarter is a supernormal growth. However, the 18% growth that we saw in the second quarter is more normalised. As a result of which we have grown 38% on the half-yearly basis.

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This is why there is a difference in the new business margin which seems to be high on a half-yearly basis but is low at QoQ basis?
It has also expanded by 120 bps on the QoQ basis. Yes, it is so when Q2 is compared with Q1 but there has been margin expansion when Q2FY20 is compared with Q2FY19.

Please tell us about the segment that received a good response in the product mix?
Actually, we have blockbuster products in almost every product segment and the reason is that different channel sells a different product. For instance, on the online channel, we sell "Click2Protect 3D Plus” and that is like a Swiss Army Knife where a person can buy a variant that he needs. Similarly, Sanchay Plus has four variants where you can choose for coverage till 25years then it is available and it also provides coverage till 99 years. You can also get back your premium among others. We also provide joint life cover with the spouse, annuity product with joint life and get in your premium back. So, HDFC Life is known as an innovator in product and that is a reason that we have product contour in every segment that has an attractive proposition. So, it is really up to HDFC Life where it decides the product on which it should focus on a particular quarter and that products tend to do well.

Seeing over the years we have seen that your direct sales have increased at a continuous pace. So, does it have any impact on your margins and what is your strategy on it?
Our direct channel has grown by over 100% and is growing and that is why our propriety channels have grown by about 64% on the first half basis, agency channel has grown by 80%. As far as direct channel including online then we started online as a large-term asset but currently, we are selling almost every product through our online channel including Sanchay Plus-type products. This particular channel is very attractive to the younger population who are below 40 in age as they come through this channel as it is a direct channel and are 5% cheaper because there is no agent or distributor of the product.

What is the mix of AUM which stands at 1.3 lakh crore at present because in recent past we have seen some events that have worried the investors about the safety and security of their hard-earned money that they are saving for retirement? What is your take on it?
We do follow a safe and calibrated asset allocation or about 96% of our fixed incomes are in government securities or triple-A-rated securities. I can say that right now we don't see any stressed assets where there has been an interest default and we haven't provided it. There is no asset like that today.

What will you focus on in the third quarter and do you have plans to come up with some new product in the quarter?
We always try to come up with something in every quarter in terms of what is suitable to the Indian customer. We are very hopeful that Q3 will see very attractive launches of two new product and every channel will have the right to sell it. And, we are just waiting for approval of one or two products.