Page 39 - LIFE INSURANCE TODAY Novemver 2017

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HDFC Life receives Sebi`s Kotak Life Insurance aims at 25-30% growth in
premium
nod for IPO
Kotak Mahindra Life Insurance expects products. So, tied agency channel
HDFC Life Insurance Company has
its premiums to grow at 25-30 per would focus more on savings products
r eceiv e d
cent this year, according to Sudhakar while the bancassurance channel
approval of Shanbhag, Chief Investment Officer. would focus on ULIPs.
SEBI to go "Year to date, our growth
ahead to is 37 per cent and the Explaining the logic behind
the move, Sudhakar said,
raise an es- full-year growth should "We observe that based on
timated Rs. be between 25 and 30 the construct of the agency
7,500 crore per cent," he said. channel, the nature of
through an initial public offering. In FY17, premium growth people who get hired and
HDFC Life had filed draft papers for the company was at their affinity, the probabil-
29 per cent, faster than ity of selling traditional
with SEBI in August and obtained its
the industry growth of 21 products which are not
"observations" on October 13,
per cent. New business premium market linked is higher compared to
which is necessary for any company
stood at Rs. 2,850 crore and renewal banca." Making a strong case for ULIP
to launch public offer.
premium, at Rs. 2,290 crore. The com- products as a good investment option
The public issue comprises sale of pany reported profit of Rs. 324 crore over mutual funds, Sudhakar recalled
1,91,246,050 equity shares, amount- on total premium income of Rs. 5,140 the pitch he had made to a 70-year-old
ing to 9.55 per cent stake, by HDFC crore in FY17. agent who also sold mutual funds.
Ltd and up to 1,08,581,768 scrips, or Sudhakar said of the regular premium, ULIPs, he said, were a good option for
5.42 per cent, holding by Standard about 35 per cent is from unit-linked wealth creation designed to provide a
Life Mauritius, according to the draft insurance policies (ULIPs) and the rest systematic way of investing over long
from traditional products. "Within re- tenures. He said, " ULIPs offer asset al-
red herring prospectus (DRHP) filed
tail, 20-25 per cent of the regular pre- location freedom with varying percent-
with SEBI.
mium comes from single-premium po- ages for equity based on an individual's
Currently, HDFC owns 61.41 per lices. At a broad level, of the total pre- risk appetite and also offers a self-re-
cent stake in HDFC Standard Life mium, about 50 per cent is from balancing or switching for one asset
and Standard Life has about 34.86 group insurance business," he said. class to another with no cost or tax im-
per cent, while the remaining is The company is keeping its distribu- plications. "The cap on charges on ULIP
with employees and PremjiInvest. tion bets evenly balanced between products is at 3 per cent up to 10 years
bancassurance and agency with about and 2.25 per cent beyond. If we do a
According to merchant banking
50 per cent coming from both chan- simple math of total cost borne by a
sources, the initial public offer (IPO)
nels. But there is customer segmenta- policyholder, the same would be on par
is expected to be worth Rs. 7,500 tion here with each channel catering or lower than that paid for other finan-
crore. to a different group with appropriate cial intermediation."

Life Insurance Today November 2017 39

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