InvestorQ : How do the quarterly results of SBI Life and HDFC Life compare for the Dec-20 quarter?
Arusha Ray made post

How do the quarterly results of SBI Life and HDFC Life compare for the Dec-20 quarter?

12 months ago

That is an interesting question because both SBI Life and HDFC Life announced their quarterly results on the same day. Here is a quick comparison of the two results, both leading players in the life insurance space.

· For the Dec-20 quarter HDFC Life Q3 net profit were up 4.92% at Rs.263 crore. However, SBI Life Q3 net actually dipped by 40.3% to Rs.233 crore. In both the cases, the pressure on net profits was largely due to higher actuarial liability provisioning.

· HDFC Life Insurance reported 81.37% growth in revenues for the Dec-20 quarter at Rs.21,129 crore. SBI Life Insurance also reported 68.27% growth in top line revenues in to Rs.26,552 crore. Both were helped by new business premium growth.

· In the case of both SBI Life and HDFC Life, the big growth came in the investment income which included the equity and debt holdings. However, both the insurers also benefited from a sharp growth in demand for life cover due to the COVID worries.

· In the case of HDFC Life, the PAT margins were marginally higher from 1.95% in Dec-19 quarter to 2.02% in Dec-20 quarter. In the case of SBI Life, the PAT margins fell from a level of 2.47% in Dec-19 quarter to just about 0.88% in Dec-20 quarter.

· HDFC Life evidenced stable solvency ratio at around 2% over the last one year expense management ratio at around 18%. The solvency ratio of SBI Life was around the levels of 2.3 but the expense management ratio hovered around the 7-8 levels.

· The common factor as stated earlier was the sharply higher provision made for change in actuarial liability. In the case of HDFC Life it was up nearly 3-fold from Rs.3,996 crore in Dec-19 quarter to Rs.12,828 crore in Dec-20 quarter. SBI growth was still higher.

· There was general improvement in AUM with HDFC Life touching Rs.1.63 trillion and SBI Life touching Rs.2 trillion. HDFC Life saw market share of new business premium or NBP improved by 214 bps to 16.4%. SBI share of new business premium in private life space grew to 23.4%. Renewal premiums grew 27% with 13th month persistency of 86.17%.