Growth bounces back in insurance sector; here’s what boosted premiums of LIC, HDFC Life

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December 11, 2019 3:34 PM

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.

Term Insurance Vs Traditional Life Insurance which policy you should take know benefits and disadvantagesHowever, the revival which was partially led by a low base, may not be able to sustain itself over the coming few months.

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.

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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.

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