As private players’ APE grows 10%, LIC’s falls 2%

By: |
Mumbai | Published: October 31, 2015 12:10:05 AM

Public sector giant Life Insurance Corporation of India (LIC) saw its annual premium equivalent (APE) fall 2% y-o-y at Rs 2,099 crore in September 2015.

Public sector giant Life Insurance Corporation of India (LIC) saw its annual premium equivalent (APE) fall 2% y-o-y at Rs 2,099 crore in September 2015. According to Kotak Institutional Equities Research, private players reported a 10% y-o-y growth in APE — while some of the small players were strong, larger players betrayed weakness — in September.

Officials in the insurance industry say while private players have focused more on selling Ulips in the past few quarters, LIC launched its Ulip only in September, which has also impacted its business.

“Private players, such as HDFC Life, ICICI Prudential and SBI Life, have been able to cash in on the rising equity markets by selling more Ulips. But LIC just launched its Ulip and it will take some time to show the results,” said a CEO of a top insurance company.

Even senior LIC officials admit that business has been very weak in the last few months. Another reason for the average performance is the falling number of individual agents. According to the data from the Life Insurance Council, LIC had around 11.63 lakh agents as on March, 2015, which came down to 11.20 lakh in August. Even its growth in new business premium has been below the private players’.

Data from Life Insurance Council also show that private insurance companies posted a 28.31% y-o-y growth in new premiums to Rs 17,125.81 crore in the first six months of the current financial year against Rs 13,346.91 crore in the corresponding period in FY14.

On the other hand, LIC saw a growth of 9.29% yo-y in new premiums to Rs 39,161.78 crore crore compared to Rs 35,833.21 crore crore in the year-ago period.

However, a few top insurance companies like HDFC Life, ICICI Prudential Life Insurance, Kotak Mahindra Old Mutual Life Insurance and SBI Life registered positive growth in September.

Sunil Sharma, appointed actuary and chief risk officer at Kotak Life Insurance, said: “We have been focusing more on selling regular premium products rather than single premium products. If you look at our entire portfolio  of products, we have products in each and every category and do need-based selling that has helped add more customers and also retain more number of existing customers.” According to the Kotak Research report, Kotak Life Insurance posted a 70% growth in individual APE in September.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition