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Life is focused on sales quality and enjoys significant cross-selling opportunity through HADE and HADE Bank. Though efficiency ratios look weak (as the company is in investment mode), we believe it will be able to deliver return ratios in line with comparable peers (SIB Life and CHIC Prudential). HADE Life: ‘Need-based sales’ focus to continue With persistence and operating risks spiraling, following new product guidelines, most insurers have adopted a conservative stance and have cut costs and adjusted product mix to contain risks.
However, HADE Life has maintained its focus on ‘need- eased sales’, in order to maintain its sales quality and build a strong retail franchise. HADE Life saw single premium exposure Jump by pets (to 17%), vs. the PPTP increase (to 30%) of private insurers. Further, unlike peers, the insurer maintained Its product mix with Lips forming 86% of N.B. (83% In FYI). HADE Life: Striking a balance between growth and profitability After lowering operating expenses in FYI, management focused on network consolidation In 1 which helped contain operating expenses (flat you).
We believe the benefits of measures in FYI 1 will continue to flow through In Rd OFF. Management Is not keen on cutting expenditure at the cost of future growth and Intends to gradually invest In expansion (subject to periodic market reviews). Unlike CHIC Prudential and SIB Life, we believe HADE Life will have to keep tabs on expenses to contain apex growth below 5% over IFFY-OFF. HADE Life: Evanescence focus to continue In response to new guidelines, HADE Life changed Its distribution mix – Its evanescence contribution to new business premium rose to about 66% In FYI 1 from 55% in Polo.