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Vibha Padalkar, MD and CEO, HDFC Life Insurance

Rebound in GDP growth next fiscal could mean improved prospects for savings and life insurance companies, believes Vibha Padalkar, MD and CEO, HDFC Life Insurance. In an interview with Businessline, she said the Budget proposal on taxing ULIPs will not impact the insurer. Excerpts:

HDFC Life reported 5.8 per cent net profit in the third quarter. What contributed to the growth?

We are fairly satisfied with the performance. The January numbers have come out. We have grown faster than the private sector. We grew by 24 per cent while the private sector grew by seven per cent. On a year-to-date basis, we have grown faster than the private sector. We have had a 250 basis points expansion in market share. Our balanced product and distribution mix has helped us. Also, product innovation is important. Term products continue to do well.

What is your expectation on the life insurance industry?

For new business premium, this year is likely to be close to zero, given that we are at negative four per cent in the private sector space. The next year should be decent with growth between 12 per cent to 15 per cent for the life insurance industry. Some of it will be the base effect. But if we are talking of a fairly good rebound in GDP growth, then there will be growth in savings, and we will channelise some of it in the life insurance sector.

Will there be any impact of the Budget proposal on ULIPs on HDFC Life Insurance?

We have typically not focussed on high ticket ULIPs of over ₹2.5 lakh and, in fact, we haven’t focussed on ULIP at all. We usually pitch some other policy but worst-case scenario will be about three per cent on our topline, but it will be zero impact on our bottomline. Balance product mix is handy for any kind of changes like this.

Instead of a high-ticket ULIP product, what alternatives can a customer go for?

They can buy non-par savings, which is an attractive product. They can also buy participating savings, where they can get their money back immediately. If a customer is in their 50s, it will be very good to buy a deferred annuity in 10 years when you retired. Below ₹2.5 lakh is tax-free. Alternatively, a customer can plan it in a manner and spread it across your family.

Will you look to use the higher FDI limit in any way?

As a listed company, eventually it is possible that more and more of foreign investment will come in. We still have a headroom today, we are not even close to 49 per cent. Gradually, over a period of time for HDFC Life and if and when our promoters decide to pare down their stake, it gives more optionality for foreign investors to come in.

With Covid now bringing a new normal, how are you redefining your strategies on a medium or long term basis?

We are working strategies that are impacting all our key stakeholders, including employees. For employees, we see a shift in how we attract and retain employees. For customers, we are migrating to various facilities. We have introduced a video-based tool for seamless customer servicing; they can directly connect with our executives without having to walk in to a branch. We have a Whatsapp bot to answer simple questions. People are using that quite a bit. We also have digital on-boarding of agents. We are licensing, on-boarding and training them through digital, and we are giving them tools for end-to-end pitch. Our traditional bancassurance channels such as HDFC Bank, Bandhan Bank, RBL Bank are all moving digital, and the entire process of on-boarding a customer is digital.