The life insurance industry continued its positive growth in the month of February as private life insurers saw individual annual premium equivalent (APE) grow at 11.4% year-on-year in February. Market leader, state-owned Life Insurance Corporation of India (LIC), saw its individual APE grow at a slower 9.3% year-on-year to Rs 2,343.2 crore in February than its private peers, showed data compiled by brokerage Edelweiss. Even if we look at the data of the current financial year upto February 2018, LIC has registered lower individual APE at 15.4% as compared to private players, at 28%. Senior officials in the insurance industry say that, compared to the previous months there has been a slowdown across segments in February. “While overall growth momentum seems to be moderating (partially due to base effect), we maintain proclivity towards financial savings will persist and industry will regain growth momentum,” said the Edelweiss Report. It added that, higher ticket size was probably the key growth driver for private sector, implying a tilt towards unit linked insurance plans (ULIPs).
Players like Bajaj Allianz, Kotak Life Insurance, Max Life, IndiaFirst Life Insurance and HDFC Life Insurance continued to see positive APE growth. “In the month of February most of the growth came from single premiums for both individual as well as group business. It is likely that, money might be going to Ulips for tax purpose. With equity funds being taxed at 10% we hope that numbers in March will also be strong for Ulips,” said a senior official with a leading insurance company. According to the data from the Insurance Regulatory and Development Authority of India (Irdai), first year premiums in the month of February for life insurance companies surged 27% to Rs 13,698.52 crore from Rs 10,791.68 crore in the corresponding period last fiscal.
The Edelweiss report added: “Overall growth momentum (Ind APE) softened to 10.5% YoY growth in Feb’18, post weaker growth recorded by both private players and LIC, which clocked sub-10% YoY growth (YTD growth of 15%). Having said that, divergence was seen among players – while ICICI Prudential Life and SBI Life were largely responsible for the soft growth (private growth, ex- ICICI Prudential and SBI Life, stood at >22%), Max Life and HDFC Life reported better growth.”