The life insurance industry started the current financial year on a tepid note with private life insurance players witnessing a 2% decline in their individual annual premium equivalent (APE) growth in April. Life Insurance Corporation of India (LIC), the country’s largest insurer, recorded higher individual APE growth than its private players, posting 3.3% year-on-year growth at Rs 1,239.5 crore, data from Edelweiss showed.
Senior officials in the insurance industry say that in the first few months of a financial year the business is usually low and it only picks after first quarter. “Insurance players commenced FY19 on a tepid note with softened growth momentum in April 2018—individual APE flat y-o-y, with private players declining 2% y-o-y and LIC growing mere 3%. While overall growth momentum seems to be moderating (partially due to base effect), we maintain that proclivity for financial savings will persist and the industry will regain growth momentum,” says the Edelweiss report. It also added that, moreover, higher ticket size was probably the key growth driver for private sector, implying a tilt towards ULIPs.
Players like HDFC Standard Life Insurance, Reliance Nippon Life, Kotak Life Insurance and DHFL Pramerica continued to see their APE growth in positive. “We are witnessing a trend that, single premiums business is growing in the past few months and it has also continued even in the month of April. Even for LIC growth came largely from the individual single premium policies. This indicates that investors are investing more into Ulips,” said a top official from the leading insurance company.
According to the data from the Insurance Regulatory and Development Authority of India (Irdai), first year premiums in April of life insurance companies surged by 4.16% at Rs 7,279.98 crore as against Rs 6,989.51 crore in the corresponding period last fiscal.