Key Features of HDFC Life Insurance
There are several Life insurance plans available in the market but now the question arises why HDFC Life insurance policies should be considered over others. So while choosing an insurance plan the first thing to consider is the price as every individual has a different affordability capacity. However, it may lead to compromising on several factors regarding the financial security of one's family. Therefore, it is crucial to compare different plans from different companies to make an informed and beneficial decision.
To help you find the best and reliable company, we at PolicyX have shortlisted top life insurance companies based on certain factors such as market share, solvency ratio, and claim settlement ratio. After intensive research, we have ranked HDFC Life Insurance company at the 2nd top position based on its annual premium. Let's explore all the key features to know better about the company.
1 Solvency Ratio
The solvency ratio is one of the important criteria that should be taken into consideration while selecting an insurer to buy a policy.
The solvency ratio measures the ability of an insurer to meet its prolonged debt obligations and other financial commitments. In other words, it determines whether the cash flow is meeting the company's short and long-term liabilities or not. IRDAI has made it mandatory for all the insurers to have a healthy solvency ratio of at least 1.5 (Solvency margin - 150%). The solvency ratio of HDFC Life Insurance is 1.91 that fulfills the IRDAI's set standards.
Let's take a look at the graph below for a better understanding.
Solvency Ratio of HDFC Life Insurance as per IRDAI for FY 2016-20
Let's understand this with an example.
When you buy a life insurance policy, you are required to pay regular premiums so that in any kind of unfortunate event, you can file a claim to receive the financial coverage from the company. To do so, the insurer must be in a good financial position. This is where the solvency ratio comes into play. The company's solvency ratio helps you assess the settling of insurance claims.
While buying an insurance product, the customers should always compare the key factors with other companies to get a clear picture of all the insurers, their industry position, and offerings.
Solvency Ratio of HDFC Life Insurance and other life insurers 2019-20
A policy is of no use if the policyholder does not receive the death benefit or the payment gets delayed for several months or years. It is always advised to check the solvency ratio to have an idea about the company's current financial position in the market.
Quarterly Solvency Ratio of HDFC Life Insurance FY 2019-20
If you want to check the solvency ratio of top life insurers, refer to the IRDAI Annual Reports.
2 Market Share
Market share provides information about the business volume and is a good parameter to judge any company's growth in terms of its annual gross premium collected in a year.
HDFC Life Insurance held approximately 6.64% of the market share of the sector's total life insurance premiums in the financial year 2020. It has shown significant growth in its annual premium over the past few years i.e., from 2016-20. As per the IRDAI Annual Reports, in the financial year 2016-17, the annual premium of the company was Rs. 8,696.36 Crores that increased to Rs. 17,238.45 Crores in FY 2019-20.
Annual Gross Premium of HDFC Life Insurance 2016-20
Before choosing a life insurance company, the main concern is: Why select this insurer? So, for your better understanding, we have compared the HDFC Life insurance company with other private-sector insurers. HDFC Life Insurance has the largest annual gross direct premium. If market share is one of the factors you are taking into consideration, then this is the ideal company for you.
Annual Gross Premium of HDFC Life Insurance and other life insurers
To provide you more clarity of the company's performance over the last few years, we have prepared a pie chart that shows a comparison between the market share of the top 3 life insurance companies based on their annual premium.
Market Share of HDFC Life Insurance 2016-17
Market Share of HDFC Life Insurance 2019-20
As per the graph, HDFC Life Insurance company commands the highest market share of 6.64% in comparison to other life insurers such as SBI Life (6.3%) and ICICI Prudential (4.8%).
Note: Market share is only calculated for the private insurers excluding the data of LIC, a public sector insurer.
3 Claim Settlement Ratio
This is the percentage of life insurance claims paid out of the total claims filed in a financial year. The higher the ratio, the easier it is for your dependents to claim the insurance when you are not with them. HDFC Life Insurance's claim settlement ratio is at 99.07% for the financial year of 2019-20. While checking the claim settlement ratio, it is also important to check the total number of claims settled.
Given below is a graph that illustrates the increase in the CSR of HDFC Life Insurance company over the last few years.
Claim Settlement Ratio (CSR) of HDFC Life Insurance 2016-20
The sum assured covered by HDFC Life Insurance has increased significantly in recent years due to loyalty towards customers and increased focus on protection sales.
If you are considering CSR as one of the important parameters for selecting an insurance company, then it is very important to compare this factor with other life insurers.
Claim Settlement Ratio (CSR) of HDFC Life Insurance and other life insurers 2016-20
4 Operating Network
HDFC Life Insurance Company has 420 offices across India and additional distribution touch-points through several new tie-ups and partnerships. Apart from its PAN India presence, it has more than 300 partnerships, comprising traditional partners such as SFBs, MFIs, and NBFCs. Moreover, it also has a strong base of financial consultants.
We have summarized the above information in a tabular form. Go through the table carefully before choosing a plan.
|Annual Gross Premium 2019-20||17238.45 Crores|
|Market Share (in %)||6.64%|
|Claim Settlement Ratio (CSR)||99.07|