HDFC Life Insurance Company Ltd Share Price – NSE  /  BSE

Insurance, Mid Cap

HDFC Life Insurance Company will hold a meeting of the Board of Directors of the Company on 15 July 2024.

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The order pertains to the assessment year 2021-22 which includes a tax demand of Rs 1,495.17 crore along with interest of Rs 592.41 crore.

The allegations stated in order includes negative reserves not being considered as part of taxable surplus; shareholders net investment income classified as income from life insurance business instead of ‘income from other sources’; certain incomes should not be claimed as exempt under Section10; contribution from shareholders' incorrectly claimed as a deduction while computing shareholders' profits; proportionate disallowance as per section 14A read with rule 8D not made and finally certain marketing and advertising expense in financials considered as admissible expense incorrectly while calculating the taxable surplus in policyholder's account.

The major issues raised in the assessment order as mentioned above are covered by orders of the Income Tax Appellate Tribunal, Mumbai and Commissioner of Income tax (Appeals) in own case for earlier years which was already disclosed vide disclosure of pending litigations/ disputes made on 14 August 2023 and 9 November 2023, respectively.

The insurer stated that tax demand and applicable interest has been incorrectly computed by the Department and it is in the process of filing a rectification application before the Tax Authority. The tax demand and interest mentioned in the said order would be reduced post passing of the rectification order by the Tax Authority.

Post passing of the rectification order, the rectified tax demand shall be approximately Rs 1,141.09 crore and interest shall be recomputed accordingly.

HDFC Life Insurance Company is a leading, listed, long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as protection, pension, savings, investment, annuity, and health. The company has more than 80 products (including individual and group products) and optional riders in its portfolio, catering to a diverse range of customer needs.

HDFC Life Insurance Company's standalone net profit jumped 14.77% to Rs 411.66 crore on 5.46% rise in net premium income to Rs 20,488.11 crore in Q4 FY24 over Q4 FY23. Net income from investments stood at Rs 7,251.41 crore in Q4 FY24, steeply higher from Rs 1,189.52 crore in Q4 FY24.

The scrip rose 0.18% to currently trade at Rs 594.40 on the BSE.

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The Insurance Regulatory and Development Authority of India (IRDAI)'s life insurance reforms aim to empower policyholders with simplified customer information sheet, training programs, mandatory policy loans to enhance liquidity, introduction of variable annuities, extended freelook period, robust processes to address customer grievances and higher surrender value to customers on early exits. These regulations have to be implemented by 30 September 2024.

While HDFC Life anticipates a 100 basis point (bps) impact on its New Business Margin (NBM) due to the higher surrender values, the company remains confident in its ability to mitigate this impact and deliver long-term value to its customers.

The company believes these reforms will significantly strengthen the life insurance industry in India, making it more accessible, transparent, and ultimately more attractive to new customers. The insurer expects these measures to contribute positively to the industry's long-term growth.

HDFC Life Insurance Company is a leading, listed, long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as protection, pension, savings, investment, annuity, and health. The company has more than 80 products (including individual and group products) and optional riders in its portfolio, catering to a diverse range of customer needs.

HDFC Life Insurance Company's standalone net profit jumped 14.77% to Rs 411.66 crore on 5.46% rise in net premium income to Rs 20,488.11 crore in Q4 FY24 over Q4 FY23. Net income from investments stood at Rs 7,251.41 crore in Q4 FY24, steeply higher from Rs 1,189.52 crore in Q4 FY24.

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HDFC Life Insurance Company has issued the following statement in reference to Master Circular on Life Insurance Products.

'We welcome the IRDAI's progressive reforms outlined in the Master Circular on Life Insurance products. Measures such as a simplified Customer Information Sheet, training programs, mandatory policy loans to enhance liquidity, introduction of variable annuities, extended free look period, robust processes to address customer grievances and higher value to customers on early exits should further the Regulator's vision of insurance for all by 2047.

We are confident these reforms will significantly strengthen the life insurance proposition in India, making it simpler, more transparent, and ultimately more attractive to prospective customers.

While we anticipate a gross impact of approximately 100 bps on the company's New Business Margin (NBM) due to higher surrender value on early exits, we are confident in our ability to largely mitigate this impact without compromising the value proposition for our customers. We expect these measures to positively impact the long-term growth prospects for the industry' - HDFC Life Spokesperson.

The above regulations have to be implemented by 30 September 2024.

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