Page 19 - Insurance Times November 2020

Rs. 326.09 crore. Its net profit among those who have submitted ex- much on the quality of the credit port-
amounted to Rs. 308.69 crore in the pressions of interest (EOIs). folio, and are also developing a credit
same period a year ago. It registered appraisal procedure so that we scan
a 34.8 per cent increase in its net pre- US-based distressed asset fund Oaktree our portfolio on a regular basis," said
mium income to Rs. 10,045.44 crore in Capital and Piramal Group, who sub- Ajit Banerjee, Chief Investment Officer,
the July to September quarter this fis- mitted bids for DHFL under the Insol- Shriram Life Insurance.
cal, compared to Rs. 7,453.68 crore a vency and Bankruptcy Code, have also
year ago. shown interest in acquiring the insur- Banerjee stressed that capital loss is
ance business, added the person. not acceptable and said the private
In a statement, HDFC Life said its pri- sector insurer is also working on main-
vate market share within the group and Two UK-based firms also submitted taining its solvency levels. "It makes
overall new business segment stood at EOIs for the stake, but their names sense that we set up our portfolio ex-
27.4 per cent and 23.3 per cent, re- could not be confirmed immediately. posure in such a way that you are able
spectively, in the first half of this fiscal. Pramerica Life Insurance is a joint ven- to insulate solvency fluctuations to the
Its 13th month persistency stood at 88 ture between DHFL's wholly-owned extent possible within the regulatory
per cent between April and Septem- subsidiary and Prudential International parameters available," he further said.
ber this year, slightly better than 86 Insurance Holdings (PIIH).
per cent a year ago. Life insurance companies have been
DHFL owns 100% stake in an interme- facing a challenge in terms of ensuring
As on September 30, its assets under diate entity - DHFL Insurance Limited returns for term insurance and guar-
management was Rs. 1.5-lakh crore (DIL) - which in turn holds 50% in anteed products, both of which have
with a debt: equity mix of 67:33. About Pramerica Life Insurance. Yardstick been witnessing a high demand during
97 per cent of debt investments were Developers, linked to Wadhawan Glo- the current pandemic and economic
in G-Secs and AAA bonds as on Sep- bal Capital, a promoter entity of DHFL, downturn.
tember 30. holds another 1% stake. Prudential In-
ternational Insurance Holdings holds Banerjee said many insurers are taking
Vibha Padalkar, Managing Director and the remaining 49% stake. exposure in forward rate agreements
CEO, HDFC Life Insurance, said: "Our (FRAs) to protect returns.
focus remains on our long-term strat- "The process to sell the insurance com-
egy of building a sustainable and prof- pany will run in parallel. Banks are "There is a lot of interest to protect
itable business and adding value to all hopeful of recovering about ?700-800 the interest rate risk by taking expo-
key stakeholders. On the back of the crore by selling DHFL's stake in the life sures in FRAs," he said, adding that
improved economic momentum, we insurance business," said the person insurers also have to be efficient in
are optimistic about being able to sus- cited earlier. making tactical calls and take positions
tain our performance across key when yield curves realign.
metrics for the year." Shriram Life Insurance to
develop credit appraisal According to Banerjee, insurers also
6 Companies in fray to buy should build expectations of customers
procedure in clear terms. Noting that there is a
DHFL's stake in Pramerica
Shriram Life Insurance is developing a lot of demand for guaranteed products
Life Insurance credit appraisal procedure in order to at present, he said: "Efforts have to be
Six Companies has shown interest in maintain the quality of its credit port- made by insurance companies to meet
acquiring Dewan Housing Finance folio amid falling interest rates and the policy holders expectation. Policy
Ltd's stake in Pramerica Life Insurance market volatility, holders also need to understand that
Company Ltd according to sources. when overall interest rates are headed
"We are doing quite well in terms of southwards, they cannot expect some-
Vijay Shekhar Sharma's Paytm, Sachin assets under management and overall thing very high from the insurance
Bansal-led Navi Technologies are size of the book. We have focussed very company,"he said.

The Insurance Times, November 2020 19