Synopsis: Canara HSBC Life Insurance shares rose 9% after strong Q1 results. The company reported 20% YoY growth in revenue and profit, with APE rising 19% to Rs. 585 crore. VNB grew 29% to Rs. 124 crore, while VNB margin improved to 21.1%. Solvency remained strong at 198%.
The shares of a Small-Cap company specialising in bancassurance-led life insurance solutions, offering a comprehensive portfolio of protection, savings, and retirement plans, are in focus following its Q1 Results.
With a market capitalization of Rs. 14,720.25 crores in the day’s trade, the shares of Canara HSBC Life Insurance Company Ltd rose upto 8.6 percent, reaching a high of Rs. 162.70 per share compared to its previous closing price of Rs. 149.85 per share.
What Happened
Canara HSBC Life Insurance Company, engaged in bancassurance-led life insurance solutions and offering a comprehensive portfolio of protection, savings, and retirement plans, is in focus following its Q1 results.
Canara HSBC Life Insurance reported a strong Q1 performance, with revenue and profit both increasing 20% YoY. The company’s Annual Premium Equivalent (APE) grew 19% to Rs. 585 crore compared with Rs. 493 crore in the same period last year, while New Business Premium rose 18% to Rs. 470 crore from Rs. 399 crore.
The company’s Value of New Business (VNB) increased 29% YoY to Rs. 124 crore from Rs. 96 crore, supported by improved business mix. VNB margin also improved to 21.1% from 19.5% in the previous year.
Embedded Value stood at Rs. 7,382 crore, marking a growth of 19.7% YoY. However, the expense ratio increased slightly to 20.7% from 19.6%, indicating higher operating costs. Canara HSBC Life’s Assets Under Management (AUM) stood at Rs. 49,683 crore, rising 13.8% year-on-year. The company’s Embedded Value (EV) was at Rs. 7,383 crore, with operating Return on Embedded Value (RoEV) at 19.7% on a rolling 12-month basis.
The solvency ratio remained strong at 198%, though marginally lower compared with 200% in the previous year, while staying well above regulatory requirements. Overall, the company delivered healthy growth across key profitability and business parameters during the quarter.
The company also showed improvement in customer retention metrics, with the 13-month persistency ratio increasing to 85.9% from 84% YoY, indicating better policyholder continuity. However, the 61-month persistency ratio remained largely stable at 55.3%, reflecting a steady long-term retention trend.
Product mix
Product mix – NBP basis (Q1 FY27): The product mix was led by Protection at 52%, followed by ULIP at 17% and Savings (Traditional) at 13%. Annuity contributed 11%, while PAR and Group Fund accounted for 5% and 1% respectively.
Product mix – APE basis (Q1 FY27): On an APE basis, ULIP remained the largest contributor at 36%, followed by Savings (Traditional) at 26% and Protection at 13%. Annuity contributed 14%, with PAR at 10% and Group Fund at 1%.
Channel mix (Q1 FY27): The channel mix was primarily driven by Canara Bank, contributing 59% of the business, followed by HSBC at 21%. Other banks contributed 6%, while other channels accounted for 15% of the mix.
Company Overview
Canara HSBC Life Insurance Company Limited is a joint venture life insurance company established in 2008 by Canara Bank and HSBC Insurance, with Punjab National Bank later joining as a shareholder. The company provides a range of life insurance solutions, including protection plans, savings plans, retirement products, and investment-linked insurance plans to help customers secure their financial future.
It focuses on customer-centric services, digital solutions, and financial inclusion through its wide distribution network. The company aims to provide reliable insurance products that support individuals and families in achieving long-term financial security and life goals.
The company has a ROCE of 8.35% and a ROE of 8.11%, indicating its ability to generate returns on the capital employed and shareholders’ equity. Its low debt-to-equity ratio of 0.15 reflects a relatively strong financial position with limited reliance on debt.
It has also maintained a healthy dividend payout ratio of 32%, showing its commitment to rewarding shareholders while retaining sufficient earnings for future growth and business expansion.
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