HDFC Life’s Value of New Business doubles to Rs. 509 crs in Q1 FY20

Other Key Highlights:

• Robust Individual APE growth of64%

• Term & Annuity APE growth of 63% and 69%respectively

• Industry leading NBM of29.8%

• Solid Operating return on EV of19.9%

• Healthy PAT Growth of12%

Mumbai / Chennai, July 23, 2019: The Board of Directors of HDFC Life approved and adopted today the consolidated and standalone audited financial results for the quarter ended June 30, 2019. Below is the summary of our standaloneresults:

Commenting on the quarter’s solid performance, Ms. Vibha Padalkar, MD & CEO said “In line with our stated strategy, we continue to focus on providing the best value proposition to our customers, partners and shareholders and generating profitable growth. We have recorded stellar topline growth, with strong traction witnessed across savings, protection and retirement solutions whilst maintaining our focus on profitability. Our diversified distribution mix coupled with product innovation has helped us address niche customer segments and emerging profit pools. We have witnessed strong growth in key indicators of economic value generated by our business viz. New Business Margins at 29.8% and Operating Return on Embedded Value at 19.9%. We have stepped up our efforts within the protection and retirement space, which we expect would fuel our growth across market cycles. Our digital capabilities put us in a good position to maximize the tremendous potential of the life insurance industry.”

Key Financial Summary

Notes:

1. Networth comprises Share capital, Share premium and Accumulatedprofits
2. During FY18, there was a one-time operating assumption change of positive Rs 1.4 bn based on review by an external actuary as part of the IPO process. Excluding this one-time adjustment, Operating return on EV would have been 20.4% forFY18
3. Persistency ratios (based on original premium) as per methodology specified in IRDA circular no. IRDA/ACT/CIR/MISC/035/01/2014 dated January 23, 2014. Group business, where persistency is measurable, has been included in thecalculations

Other key highlights for the quarter ending June 30, 2019:

• Private Market Share: We expanded our market share in the private sector to 25.1% as compared to 22.3% in Q1 FY19, based on total new business received premium. Consistently ranked amongst the top 3 private players in individual and group segments with market share of 17.5% based on Individual WRP (YoY increase of 420 bps) and remained steady at 30.0% based on Group business (on received premium) during Q1FY20.
• New Business Lives and Sum Assured: Total number of lives insured grew by 26% to 1.3 Cr during Q1 FY20. Overall new business sum assured also saw an increase of 46% to Rs 1.8 lakh Cr during the same period.
• Product Portfolio: Maintaining a profitable product suite has always been at the forefront of our thinking, with an emphasis on the protection and retirement space. Term protection APEhas

increased to Rs 304 Cr during Q1 FY20, from Rs 187 Cr in the corresponding period last year, representing a strong growth of 63%. Annuity APE was at Rs 70 Crs in Q1 FY20, growing by 69% over Q1 FY19. Protection and annuity businesses comprise a substantial 26% and 18% of total new business premiumrespectively.

• Distribution Mix: Our diversified distribution mix is demonstrated by the wide access to the customers of our 270 plus partners, including more than 40 new-ecosystem partners as on June 30, 2019. This is further supplemented by our 421 branches spread across thecountry.
• Assets Under Management: We are one of the leading fund managers in India with an AUM of around Rs. 1.3 lakh Cr; the debt:equity mix as on June 30, 2019 is 62:38. Almost 96% of debt investments are in GSecs and AAA bonds as on June 30, 2019.

Definitions and abbreviations

• Annualized Premium Equivalent (APE) – The sum of annualized first year regular premiums and 10% weighted single premiums and single premiumtop-ups
• Assets under Management (AUM) – The total value of Shareholders’ & Policyholders’ investments managed by the insurance company. AUM includes investments disclosed in the Balance sheet under Schedule 8, 8A, 8B & loans in the nature of investments included in Schedule9
• Embedded Value Operating Profit (EVOP) – Embedded Value Operating Profit (“EVOP”) is a measure of the increase in the EV during any given period, excluding the impact on EV due to external factors like changes in economic variables and shareholder-related actions like capital injection or dividendpay-outs
• First year premium – Premiums due in the first policy year of regular premiums received during the financial year. For example, for a monthly mode policy sold in March 2019, the first monthly instalment received would be reflected as First year premiums for 2018-19 and the remaining 11 instalments due in the first policy year would be reflected as first year premiums in 2019-20, when received
• New business received premium – The sum of first year premium and single premium, reflecting the total premiums received from the new businesswritten
• Operating expense – It includes all expenses that are incurred for the purposes of sourcing new business and expenses incurred for policy servicing (which are known as maintenance costs) including shareholders’ expenses. It does not includecommission.
• Operating expense ratio – Ratio of operating expense (including shareholders’ expenses) to total premium
• Operating return on EV – Operating Return on EV is the ratio of EVOP (Embedded Value Operating Profit) for any given period to the EV at the beginning of thatperiod
• Persistency – The proportion of business renewed from the business underwritten. The ratio is measured in terms of number of policies and premiumsunderwritten
• Premium less benefits payouts – The difference between total premium received and benefits paid (gross ofreinsurance)
• Renewal premium – Regular recurring premiums received after the first policyyear
• Solvency ratio – Ratio of available solvency margin to required solvencymargin
• Total premium – Total received premiums during the year including first year, single and renewal premiums for individual and group business
• Weighted received premium (WRP) – The sum of first year premium received during the year and 10% of single premiums including top-uppremiums

About HDFC Life

HDFC Life Insurance Company Limited (formerly HDFC Standard Life Insurance Company Limited) (‘HDFC Life’ / ‘Company’) is a joint venture between HDFC Ltd., India’s leading housing finance institution and Standard Life Aberdeen, a global investment company.

Established in 2000, HDFC Life is a leading 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. As on June 30, 2019, the Company had 38 individual and 11 group products in its portfolio, along with 8 optional rider benefits, catering to a diverse range of customerneeds.

HDFC Life continues to benefit from its increased presence across the country having a wide reach with 421 branches and additional distribution touch-points through several new tie-ups and partnerships with over 270 partners comprising NBFCs, MFIs, SFBs, etc and including more than 40 new-ecosystem partners. The Company has a strong base of financial consultants.

For more information, please visit our website, www.hdfclife.com. You may also connect with us on Facebook, Twitter, YouTube and LinkedIn.

Disclaimer

Except for the historical information contained herein, statements in this release which contain words or phrases such as ‘will’, ‘would’, ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements’. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion in business, the impact of any acquisitions, technological implementation and changes, the actual growth in demand for insurance products and services, investment income, cash flow projections, our exposure to market risks, policies and actions of regulatory authorities; impact of competition; experience with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the impact of changes in capital , solvency or accounting standards , tax and other legislations and regulations in the jurisdictions as well as other risks detailed in the reports filed by HDFC Limited, our holding company, with the United States Securities and Exchange Commission. HDFC Life undertakes no obligation to update forward-looking statements to reflect events or circumstances after the datethereof.

None of Company or any of its directors, officers, employees, agents or advisers, or any of their respective affiliates, advisers or representatives, undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise and none of them shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this press release or its contents or otherwise arising in connection. Further, nothing in this press release should be construed as constituting legal, business, tax or financial advice or a recommendation regarding the securities. Although Company believes that such forward‐looking statements are based on reasonable assumptions, it can give no assurance that such expectations will be met. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of Company’s management on future events. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Company’s control. Past performance is not a reliable indication of future performance.

Before acting on any information you should consider the appropriateness of the information having regard to these matters, and in particular, you should seek independent financial advice.