Canara HSBC Life Insurance Company Ltd (CANHLIFE) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Anuj (Canara HSBC Life Insurance Company Ltd): reinforcing our strategy of maintaining a well diversified product mix, which balances growth, profitability and customer relevance, customer preference. Renewal premium growth continued to grow at a healthy pace of 18% year-on-year.
Anuj (Canara HSBC Life Insurance Company Ltd): H1 FY '27, reflecting the improving quality of our business and strong customer engagement. Friends, our 13th month persistency also improved to 85.6% compared to 84.4% in H1 FY '26. While our 61st month persistency stood at 54.6%, highlighting the durability of our book and effectiveness of retention initiatives along with, robust sales quality. We believe these trends are a testament to the strength of our customer proposition, prudent underwriting, and distribution practices, and our continued emphasis on delivering superior customer experience. Strong persistency remains a key contributor to embedded value creation and long-term profitability. Friends, on our agency channel, I'm happy to share that we have onboarded over 1,900 sales distributors and generated an APE of Rs. 40 crores during H1 FY '27. We will continue to scale up this channel in a phased manner, and we're very confident of further growth throughout the FY '27. I'll now come to financial and operating metrics, and on that, I'm happy to share that we continue to focus on maintaining our VNB growth, which is higher than the APE growth. Our value of new business for H1 FY '27 stood at Rs. 266 crores, registering a healthy growth of 24% year-on-year, driven by shift towards traditional products. Friends, despite the GST impact and our ongoing investments in the agency channel, we have reported a healthy VNB margin of 21.3% for H1 FY '27, as compared to 19.6% reported in H1 FY '26. So, there is healthy growth in the VNB margin. The margin improvement was led by a favorable product mix, shift towards traditional, yield curve benefit, and improving operating leverage driven by higher volumes. Our embedded value, Indian embedded value, grew by 26%, sorry, by 16% year-on-year, reaching Rs. 7,622 crores with a healthy operating ROEV growth of 19.8%. During the period, we achieved key milestone of crossing Rs. 50,000 crore in AUM, registering 14% year-on-year growth. Our profit after tax for H1 grew by 11% to Rs. 71 crores. Our total expense ratio for H1 FY '27 stood at 20.5% compared to 19% in the corresponding period last year. However, excluding the impact of GST, our opex stood at 19.2% compared to 18.5% for H1 FY '26, and remains broadly in line with the range. Friends, solvency ratio remains comfortable at 180%, and is well above the regulatory requirement. Last, I'd like to touch upon the regulations. The draft regulation, the consultation paper which has come, and I think it's a step in the right direction. The latest discussion paper on distribution framework issued by IRDAI is aimed at building a more transparent, customer-centric, and efficient insurance ecosystem. We believe these reforms represent a significant step forward for the insurance industry, fostering greater transparency, customer centricity, and long-term sustainability. While we await the final framework, we are confident in our ability to adapt swiftly and effectively. We will continue to stay agile, innovate proactively, and strive to outperform our medium-term objectives. However, we'll wait for the final guidelines before drawing any conclusions. So thank you very much. Thanks for your time, and I'm very happy to take questions which, you people may have. Over to you.
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Sanketh Godha (Avendus Spark): Yeah. Thank Thank you for the opportunity. Sir Sir, my first question is on your solvency, which is at 180.
Anuj (Canara HSBC Life Insurance Company Ltd): Yeah.
Sanketh Godha (Avendus Spark): Despite
Sanketh Godha (Avendus Spark): raising the subdebt in that sense. So so is it fair to say that if if your growth seems is is driven by protection or non-par or annuity, which are typically capital consuming and RBC norms don't come maybe as quickly from the regulator, is it fair to say that the if if this growth momentum continues in these product segments, then you might go for a capital raise?
Anuj (Canara HSBC Life Insurance Company Ltd): Okay, thanks Sanket for asking that question. See, solvency ratio as of 30th of September is actually a factor of many things. And one of the factors is also the equity market. And we all know that towards the end of September, in the equity market, there was correction. So, that is one reason. Similar thing we saw in March also. But at the same time, I would like to mention that we have actually plans, in fact, if required, we are going to raise subdebt, a subordinate debt. We don't foresee requirement coming for the equity fundraise at this point in time. So, I think we are fairly kind of capitalized, and our solvency is much above the regulatory minimum of 150%. And the subordinate debt which we are going to raise in this quarter should help us in further improving the solvency. And as I mentioned, I think the market conditions also play an important role, so hopefully as market kind of we have seen today if market reverses what it was on 30th of September, there will be also automatic benefit which will accrue to us.
Sanketh Godha (Avendus Spark): Right. Sir, is it fair to say that in in your shareholder's inve- investment, you have equity book to and and that's why you you are seeing a solvency impact in that sense? Otherwise, equity market should ideally not be impacting your solvency, right?
Anuj (Canara HSBC Life Insurance Company Ltd): Yeah. So, we don't have equity in our shareholder portfolio, it's there in the policyholder fund. So, both par as well non-par, we have equity proportion. So, that is where the equity play comes in.
Sanketh Godha (Avendus Spark): Okay. Understood, sir. And, and the second question, sir, is is on on the new new norms and what we understand is that the credit life is probably the most impacted product in in the new norms which is proposed if it goes in the same format. And, and for us in 1H, credit life is almost or, or non-retail protection, which I believe is largely credit life, is 6% of the total APE. So, so, just wanted to understand, sir, what what what are the commission structures what we follow today? Whether they will see a material change compared to the proposal, what is mentioned and current practice? And, and given given the payment structures are also changed, means it can't be topped up with the loan and, but need to be paid separately, if if if payment dynamics change with respect to that particular product by the consumer, how do you see the impact and how do you think to mitigate the impact on that line of business, which which in my view is a margin margin-accretive product for you?
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