HDFC Life to continue to invest in expanding branches for business growth

Vibha Padalkar, HDFC Life Insurance

HDFC Life Insurance will continue to invest in strengthening its distribution network by expanding branches for business growth. This fiscal, the insurer is planning to open around 80-100 branches across the country, mostly in tier 2 and tier 3 cities.

“Our VNB (Value of New Business) margin growth will be range bound for FY26, because we need to invest back into business growth in our agency. We added about 117 branches this year (FY25), and 200 branches over the last two years. So, whatever margin uplift I might get, I want to plough it back into the business,” MD & CEO Vibha Padalkar told businessline.

New branches

“We should open another 80-100 branches in this fiscal. It will be mainly in tier 2 and 3,” Padalkar said.

According to her, the product mix for tier 2 and 3 cities is “reasonably” similar to tier 1. “It’s almost holistic, all products sell quite well. The (average) ticket size is slightly lesser, because we’re looking at the upper quartile of tier 2 and the upper quartile of tier 3,” she informed.

For HDFC Life, at the end of the last fiscal, average ticket size of life insurance policies stood at around Rs 1 lakh, which grew around 9 per cent year-on-year.

The insurer’s Individual Annualised premium equivalent (APE) for FY25 grew 18 per cent year-on-year, backed by 9 per cent growth in average ticket size and 9 per cent growth in the number of policies.

Total APE for the last financial year grew 16 per cent y-o-y to ₹15,479 crore, while Value of New Business (VNB) during the period rose 13 per cent y-o-y at ₹3,960 crore. For FY25, its net profit rose 14.87 per cent y-o-y to ₹1,802.12 crore from ₹1,568.86 crore during FY24.

Total APE rose almost 10 per cent y-o-y for the fourth quarter last fiscal, while VNB grew 12 per cent y-o-y for the quarter. VNB margin grew 40 basis points y-o-y at 26.5 per cent for Q4FY25.

Published on April 18, 2025