HDFC Life, one of India's leading insurance providers, is currently experiencing some slowdown in its savings policies. Shedding light on this scenario in an exclusive interview with CNBC-TV18, the company's CEO and Managing Director Vibha Padalkar said, that the policies with premiums below Rs 5 lakh have witnessed substantial growth, ranging between 15 to 17 percent.
However, the real concern arises when we look at policies with premiums exceeding Rs 5 lakh, she said.
This growth in policies with premiums below Rs 5 lakh has been particularly robust, and it indicates a healthy demand for insurance policies in the sub-Rs 5 lakh premium segment.
"In the higher premium segment, however, the growth rate has been much lower, with new policy growth hovering around 9 percent," confirms Padalkar.
This contrast between the two premium segments highlights the core issue faced by
HDFC Life — a slowdown in the demand for higher-value insurance policies.
Padalkar suggests that the slowdown in policies with premiums over Rs 5 lakh might be temporary. She believes that the machinery responsible for selling policies in the sub-Rs 5 lakh premium range is functioning efficiently and experiencing healthy growth. As a result, the number of policies (NOP) in this segment has shown promising growth. However, she acknowledges that it will take some time for the demand for policies with premiums exceeding Rs 5 lakh to pick up again, especially in their wealth channels.
Savings plans, in general, serve as financial instruments for wealth accumulation while providing insurance coverage. These plans are designed to cater to individuals' specific financial needs, offering flexibility and varying risk levels based on individual preferences. Savings plans are often introduced by the Indian Government, public sector banks, or financial institutions, ensuring the safety and security of the invested capital. Moreover, these plans are considered low-risk investments while still offering attractive returns.
A look at savings plans:
(Source: Policybazaar)
First Published: Sept 25, 2023 3:46 PM IST