Deepak Parekh, Chairman, HDFC (File image)
Life insurance companies must be held accountable only for the expense management limit by the regulator, said HDFC Life chairman Deepak Parekh.
Addressing shareholders, Deepak S Parekh, chairman of HDFC Life Insurance said during the company’s annual general meeting (AGM) that there should be sole focus on expense management limits, rather than have numerous rules on what they (life insurers) can or cannot invest into.
“This would be similar to a TER, which is the total expense ratio followed by mutual funds as introduced by Sebi,” he added. Parekh also said that discussions are on with the insurance regulator IRDAI on this matter.
On the product front, he said, “at present life insurers are only allowed to sell life insurance products at their branches.”
“Life insurers cannot sell NPS or health indemnity covers. Allowing distribution of NPS and health will help improve insurance reach,” said Parekh.
Coming to the financial results, he explained that the brand presence, technological solutions and diversified distribution network helped improve the business. Parekh said that HDFC Life has ranked consistently among top two private sector companies by new business premiums.
“The pandemic heightened the awareness of life insurance, especially among youth. Further, the insurance FDI hike to 74 percent is also a positive move for the sector,” he added.
In FY21, HDFC life insured 40 million customers and settled 2,90,000 death claims amounting to over Rs 3,000 crore.
“The second wave and local lockdown has affected life insurance sector. In Q2, the business is expected to pick up with lifting on restrictions in a phased manner,” he said.
Talking about the reserves, he said the company has provided Rs 165 crore for FY22 and an additional reserve of Rs 700 crore in the wake of COVID-19 deaths.
“We will continue to review the adequacy of the reserves and buffer up as needed and if needed,” he said.