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State of Global and Indian Economy:
Let me first start with my view on the Global and Indian Economy.
Globally, the uncertainties around economic outlook have eased slightly compared to last year. However, the ongoing trade and tariff uncertainties has caused multilateral agencies to revise downwards their growth and trade forecasts. The World Bank has revised down its global growth forecast in its June 2025 report, projecting global GDP growth of 2.3% in 2025 and 2.4% in 2026 - lower than the 2.7% that was previously expected.
On the domestic front, the National Statistical Office’s latest data shows strong economic performance. Real GDP growth in Q4 of 2024-25 rose to 7.4 percent from 6.4 percent in Q3, while Real Gross Value Added grew by 6.8 percent. For the full year, GDP growth stood at 6.5 percent in FY25, indicating robust economic momentum as we surpassed Japan to become the 4th largest economy in the world. India continues to remain the fastest growing major economy in the world.
Looking ahead to 2025-26, growth is expected to continue, driven by private consumption and increased fixed capital formation. Investment activity is likely to improve due to higher capacity utilization, healthier corporate balance sheets, and sustained government capital expenditure.
Trade policy uncertainty still weighs on export prospects, but the recent free trade agreement with the United Kingdom and progress with other countries provides support for trade. Agriculture is set to benefit from an above-normal south-west monsoon forecast and resilient allied activities. The services sector is also expected to maintain its positive trajectory.
Nevertheless, risks remain from ongoing geopolitical tensions, global trade uncertainties, and weather-related challenges, which could impact growth.
Despite global challenges, our economy showed resilience and steady growth. We remain optimistic about the year ahead.
Life Insurance Industry in India
The life insurance industry experienced mixed growth in FY25. Individual weighted received premiums grew by 10%, while the number of policies declined by 7%. Private insurers outperformed, growing 15% in total premiums and 5% in terms of number of policies. The total sum assured by Indian life insurers rose 16% to Rs 102.6 lakh crores by March 2025.
India’s life insurance market holds significant growth potential. According to Swiss Re, it is projected to be the fastest-growing insurance market among the G20 nations, with an average annual growth rate of 7.3% from 2025 to 2029. This optimistic outlook is driven by strong economic growth, rising disposable incomes, a young population, increasing risk awareness, expanding digital penetration, and supportive regulatory developments.
Despite this potential, India remains largely under-insured, with life insurance penetration at only 2.8%. The country also faces the highest protection gap in Asia at 91%, highlighting a vast opportunity for growth. Insurers are tapping into the opportunity by rapid expansion into Tier 2 and Tier 3 cities leveraging distribution presence of partner banks and micro finance lenders to offer appropriate insurance solutions.
The regulator has been actively promoting the vision of “Insurance for All by 2047,” introducing key measures such as increased early policy surrender payouts and increasing the foreign direct investment limit to 100%. Upcoming regulatory initiatives include the implementation of a Risk Based Capital framework, a Risk Based Supervisory Framework and the introduction of composite licenses allowing insurers to offer life, general, and health insurance under one entity.
These regulatory reforms aim to enhance ease of doing business, foster competition, improve penetration, and create a more efficient, customer-centric insurance ecosystem in India.
HDFC Life Performance Update
Let me now come to your Company’s performance for the year ended March 2025. During the year, your company achieved a 17% growth in individual Weighted Received Premium (WRP). The number of policies increased by 9%, while the average ticket size grew by 8%, reflecting a well-balanced growth in both volume and value.
HDFC Life attained its highest-ever market share of 11.1% on individual weighted received premium in the overall industry, maintaining its position among the top three players.
As of March 31, 2025, our Assets Under Management stood at Rs. 3.36 lakh crores, with an Embedded Value of Rs. 55,423 crores. Our solvency ratio remained robust at 194%. The new business margin for the year was 25.6%, delivering a (VNB) i.e Value of New Business of Rs. 3,962 crores. Despite challenges such as increased surrender values and an adverse product mix, our new business margins demonstrated resilience, declining by only 70 basis points, thanks to proactive mitigations.
During FY25, we expanded our customer base by insuring over 5 crore lives. The average age of our customers remained around 36 years, with 75% being first-time customers.
Renewal collections grew by 14% year-on-year, underscoring the sustained trust our customers place in us. Persistency ratios at 13 months and 61 months stood at 86.9% and 63.5%, respectively, with the 61-month persistency showing a notable improvement of 10 percentage points compared to the previous year.
Subsidiaries Update
Our subsidiary, HDFC Pension Management Company, has the highest AUM amongst the private NPS Pension Fund Managers. The AUM has now crossed Rs. 1,15,000 Crores, garnering around 43% share of industry AUM growth and 52.9% share of the private sectors AUM growth for the period ending March 31st 25. For retail and corporate segments, HDFC Pension continues to be the largest private pension fund manager by AUM.
HDFC International Life and Re Company Ltd. has successfully completed 9 years of operations since its incorporation in 2016. As the first Life & Health reinsurer incorporated in the Dubai International Financial Center and regulated by the Dubai Financial Services Authority, the company has steadily expanded its presence across the Gulf Cooperation Council, the broader Middle East, the North Africa region, and select emerging markets.
Conclusion
I would like to conclude by saying that at HDFC Life, our journey through years of challenging and dynamic business cycles has been a testament to our resilience and vision. We have relentlessly pursued innovation in our products and strengthened our distribution capabilities, building a diverse and robust franchise that consistently drives sustainable growth and profitability.
Looking ahead, we are poised to seize the immense macroeconomic opportunities before us. Our strategy is clear: to expand thoughtfully and purposefully while transforming our entire ecosystem through cutting-edge technology. This tech-led evolution will empower us to deliver an unparalleled, best-in-class experience to every customer we serve.
I want to take this moment to sincerely thank our valued customers for their unwavering trust and confidence in us. I would also like to thank our passionate and dedicated employees - your commitment fuels our progress and inspires excellence every single day. I also extend our heartfelt gratitude to our shareholders for their continuous support, and to IRDAI for empowering the industry with visionary leadership.
Together, as one united force - our nation, our industry, and our company -we will rise above uncertainties and challenges. With shared determination and collective strength, we will continue to grow, innovate, and emerge stronger than ever before.
Disclaimer: This is a sponsored article. It is not part of Outlook Money's editorial content and was not created by Outlook Money journalists.