Slowing down of sales of both unit-linked insurance plans (Ulips) and traditional policies in the month of September has directly impacted the growth in the annualised premium equivalent (APE), which has slipped to 3% during the month.
According to the Kotak Institutional Equities Research, private players reported a 10% on-year
(Y-o-Y) growth in APE. While some small players were strong, larger players betrayed weakness during the month under review.
Market participants said weak numbers can be attributed to selling of more single premium insurance and group insurance business by insurance companies. The data from Kotak Institutional Equities Research also shows that overall APE (individual and group business) for private players was up 10% on year in September and 17% YTD. Life Insurance Corporation of India (LIC) reported a 2% decline, leading to 3% growth for the overall industry.
However, a few of the top insurance companies such as HDFC Life, ICICI Prudential Life Insurance, Kotak Mahindra Old Mutual Life Insurance and SBI Life have registered positive growth in September. Arijit Basu, CEO and MD at SBI Life, said: “Generally, business in the first two quarters of any financial year is very average. But we changed the strategy this year and with our agents and distributors have been able to deliver strong business in the first two quarters. Our business came from mix of Ulips and traditional products.”
According to the Kotak Research report, SBI Life reported a 33% growth in individual APE, leading to similar growth in overall APE. The growth for the company was 49% year to date.
On the other hand, other major players such as Bajaj Allianz, Birla Sun Life and Reliance Life were among who saw negative growth in APE. A few small players like Bharti AXA, Shriram Life and Tata AIA Insurance witnessed growth in APE for September.