The industry has shown a robust performance with industry-wide growth in overall Annual premium equivalent at 41 per cent YoY almost entirely driven by LIC, up 79 per cent YoY.
The year 2020 has begun quite well for the life insurance sector. The industry has shown a robust performance with industry-wide growth in overall Annual premium equivalent (APE) at 41 per cent year-on-year (YoY) almost entirely driven by Life Insurance Corporation (LIC), up 79 per cent YoY. According to Kotak Institutional Equities Research, Life Insurance Corporation (LIC) has gained significant market share with 99 per cent year-on-year (YoY) growth in individual Annual premium equivalent (APE) in January 2020.
The total premium collected as single premium and from regular premium policies is adjusted to arrive at the APE. The private sector over the same period reported a 10 per cent growth. Private players reported 11 per cent YoY growth in overall APE in January 2020, with 10 per cent YoY growth in individual APE.
The insurance regulator had called for a change in the guidelines of the life insurance policies. From February 1, 2020, only those policies with new guidelines were allowed to be sold.
Most large private players reported muted performance – ICICI Prudential Life slipped back in the red (down 3 per cent YoY), HDFC Life was weak at 12 per cent YoY, SBI Life moderated at 17 per cent YoY and Max Life was up 15 per cent YoY.
LIC has re-priced a couple of its products from February. According to Kotak Institutional Equities Research, some of LIC’s flagship products like ‘Jeevan Umang’ and ‘Jeevan Labh’ were instrumental in its performance. Notably, even in the month of November, LIC reported 104 per cent growth in individual APE due to the sunset period of a couple of its products.
The share of single premium in overall business for private players increased to 37 per cent in January 2020 from 33 per cent in December 2019, albeit lower than 40-55 per cent observed over April 2019-November 2019. Among major private players, the share of single premium increased month-on-month for Bajaj Life, HDFC Life and ICICI Prudential Life.
The market share of private players in group business increased to 25 per cent in January 2020 from 14 per cent in December 2019 led by strong 25 per cent YoY growth in January 2020. LIC’s group business was muted at 1 per cent YoY. Among major private players, most players reported 20-360 basis points month-on-month gains in market share in the group business.