After a weak trend of the last two months, growth is back in the insurance sector with public sector insurer LIC leading the revival, a report said.
After a weak trend of the last two months, growth is back in the insurance sector with public sector insurer LIC leading the revival, a report said. The private players posted an annual premium equivalent (APE) growth of 27 per cent on-year in November, a report by Kotak Institutional Securities said. LIC nearly doubled its premium, while HDFC reported a revival after fall in October and ICICI Life reported a second consecutive month of high-teen growth. After a period of three months, SBI crossed 20 per cent growth, the report added. “Private players reported 29% yoy growth in overall APE in November 2019, with 27% growth in individual APE and 53% yoy growth in group business. Overall industry APE was high at 67% yoy owing to 1X yoy rise in individual APE for LIC and 1.4 X yoy increases in group business,” the report noted.
However, the revival which was partially led by a low base, may not be able to sustain itself over the coming few months. “Growth in the previous two months was moderating and raising some concerns of weak FY2020E. After a strong November, it now seems that mid-to-high teens growth may hold,” the Kotak report also said.
In the first seven months of FY20, the life insurance industry saw new business premiums at Rs. 1.43 lakh crore compared to Rs. 1.08 lakh crore in FY19, a growth of 31.84%, showed the IRDAI data. The insurance industry and LIC witnessed APE at 9% and 13%, respectively, in October. The growth in the insurance industry was largely driven by the growth in group single premium and group non-single premiums.