HDFC Life IPO soon after Merger

In the last two years, HDFC Life Insurance Co has been coming close to and then shying away from the No 2 spot in the private life insurance industry. This March, however, it consolidated its No 2 position as it widened the gap against close rival ICICI Prudential. HDFC Life chief actuary Srinivasan Parthasarathy tells TOI what the company’s performance has been and what its IPO plans are. Excerpts:

This March, HDFC Standard Life booked Rs 8,696.21 crore in premium, coming ahead of ICICI Prudential at Rs 7,863.40 crore, would you say this a milestone for the company?

Yes. But one of many such milestones. We have been at second place for a few months these last two years even prior to this. But, the surprise has been SBI Life Insurance performance and its cementing its No 1 position. We have been particularly focused on growth across distribution channels both on the bancassurance front and our agency force.

When would HDFC Life be listing its IPO?

We are focused on our merger with Max Life Insurance. As soon as that is complete, we will be looking at listing. So tentatively that would be around April 2017-18. Almost everyday, we are meeting with underwriters, merchant bankers, who are overseeing the merger. So once that goes through in the next nine months.

Since Max Life and HDFC Life are in very similar lines of business, would there be any redundancy, any job cuts?

No. We actually have very different strengths and the merger will complement our different set of skills. For instance, Max Life has a very strong agency force and we will benefit from that. We are not looking at job cuts, only assimilation of their workforce.

With one section of consumers increasingly focused on quick returns on investments, do you still see sizeable interest for pure-term life insurance products?

Yes, we have seen good interest in pure-play insurance products, which is why we have revised an existing product and launched HDFC Life Click 2 Protect 3D Plus. The policy guarantees continuation of income for the family, despite death, disability or terminal illness successful legacy planning. Another interesting feature is that it accounts for inflation. If a person dying was earning X amount, his family needs may be Y, however, this might increase exponentially as the years grow. So, we have introduced an income replacement option for salaried persons to ensure the family's needs are met even after his death.

HDFC Life's claims settlement ratio of above 98% has one of the best in the industry, can you tell of your efforts in this front?

We have been very active on our fraud and risk management side. So, this ensures we are paying only our genuine customers and not fraudsters. It is also about the culture of the organisation. At times, even when it has been well within our rights to refute a claim legally we have not done so. There was this instance of a 23-year- old girl, who died of cancer in New York, and she had not mentioned that she had taken treatment for cancer while taking up the policy. But, we realised her father would not have let her travel had he felt there might be a occurrence of cancer. So, in genuine cases, we would like to give our customers some leeway. At the end of the day, life insurance is about having a safety net.