HDFC Life negotiating price revision with reinsurers; clocks in 14% YTD growth
HDFC Life Insurance Company Limited is in negotiations with reinsurers on price revision, Vibha Padalkar, MD & CEO, told CNBC-TV18. She also mentioned that HDFC Life has clocked in 14 percent YTD growth versus industry's growth of 6 percent. She believes the industry is well poised to come of the turbulent times presented by the pandemic.
HDFC Life Insurance Company Limited is in negotiations with reinsurers on price revision, Vibha Padalkar, MD & CEO, told CNBC-TV18.
“Almost all companies have received communication from a couple of reinsurers (reinsurers are companies that provide insurance to insurance companies) that are active in the term space, including HDFC Life, are in negotiation with them. I do not think it's anywhere as high as 40 percent; it would not be justified either, but it will be higher because of both the pandemic but more importantly, as we try and drive quite rightly, protection into interior India, the profile will differ and this is reflective of those profiles and the mortality experience in those profiles,” Padalkar said.
It has been a little turbulent for the insurance sector overall, Padalkar noted.
She said, “It has been turbulent for the overall sector but I do believe that we are well poised as a sector against this pandemic as we come out of it. There were some supply side constraints, in terms of just the ability to medically underwrite and so on, and reach customers, that is very much out of the way and is very well reflected in our numbers. HDFC Life’s growth for the standalone month of October, we are looking at a 21 percent growth against an overall industry growth of 13 percent and also if you look at it from a 2-year CAGR perspective, we have been able to clock a 33 percent growth, that very much shows we are back on track. Even on a year-to-date (YTD) basis, we have clocked a 14 percent growth versus an industry growth of 6 percent.”
According to her, even with the price increases, India will be at the low end. “Even with this kind of price increase, India in terms of rates would be significantly on the lower end,” said Padalkar.
“I do not feel that demand is going to be significantly impacted. You are talking about anything between 200 to 400x of cover. So, for people who really want to protect their families, a slight increase and hypothetically a 40 percent or a 30 percent increase will not mean automatically a consequent increase in prices to the same extent; it could be 10 percent of that or it could be 50 percent of that or anywhere in that range. So I do believe that now with this inflection point due to the pandemic, there will be a fair amount of demand uptake regardless of price increase,” she said.
For the entire management interview, watch the video
(Edited by : Dipikka Ghosh)
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