The year gone by may not have been as good for the insurance industry as some people believe, says Amitabh Chaudhry, MD & CEO, HDFC Life. In an interview with Vishwanath Nair, Chaudhry talks about the outlook on growth in the new year, problems with the bancassurance guidelines and probable ways to improve insurance penetration in India.
The year 2013 was considered a good one by a number of private life insurers. How has it been for you?
It depends on how one defines a good year. If you look at net premium as a metric, i.e., total premium collected less surrenders and claims, only three of the top seven players are positive as of September 2013. We were 50% higher than the second biggest player in net premium earned. If you define it by new business growth, you will see a few players stand out while there are many others in not so good a shape.
We have retained our position as a top-3 private player in new business premiums and our sum assured, an indicator of protection levels, has seen a quantum jump. Our renewal premiums and group business continue to outperform the industry.
Also, our operating expense ratios are better, our AUMs have grown faster and benefits paid as a percentage of AUM are lower than our peer group. We have been reorienting our product mix over the years and that has seen substantial progress in 2013. Also, we have taken steps to reduce mis-selling and service-related complaints and are on track to achieve those goals.
What kind of premium growth did you see in the last year and what will be your growth like this year?
Our total premium has grown about 11% in the first nine months of this fiscal. In 2014, we will continue our focus on being a sound long-term player delivering quality growth across our business metrics. We will continue to grow existing partnerships and add new ones.
Public sector banks have been asked to take up the broker model for bancassurance and it is expected that private banks will have to follow suit. What share of your total business comes from the bank channel? What is your take on the broking model?
Bancassurance contributed 43% to the new business premiums collected by private insurers in 2012-13 and is the largest channel for private insurers. With two-thirds of business from bancassurance, HDFC Life is geared