Life Insurance: Annualised premium of private insurers grows in January

By: |
Published: February 12, 2020 7:16:25 AM

Strong agency push to sell select products, prior to reprising in February, was the likely reason.

life insurance, LIC, LIC india, life insurance policySBI Life’s individual APE growth was up 17% y-o-y.

LIC gained significant market share with 99% y-o-y growth in individual annualised premium equivalent (APE) as compared to muted (10% y-o-y) growth reported by the private sector in January 2020. Strong agency push to sell select products, prior to reprising in February, was the likely reason. Most large private players reported muted performance – ICICI Prudential Life slipped back in the red (down 3% y-o-y), HDFC Life was weak at 12% y-o-y, SBI Life moderate at 17% y-o-y and Max Life was up 15% y-o-y. New Equity MF inflows picked up to Rs 72 bn from Rs s32 bn of inflow in December and net outflow of Rs32 bn in November, supported by higher gross inflows to pure equity funds.

LIC steals the show, once again

Private players reported 11% y-o-y growth in overall APE in January 2020, with 10% y-o-y growth in individual APE. Industry-wide growth in overall APE was robust at 41% y-o-y almost entirely driven by LIC, up 79% y-o-y. LIC has re-priced a coupled of its products from February. Our channel checks suggest that its agents seem to have pushed some of its flagship products like ‘Jeevan Umang’ and ‘Jeevan Labh’ as sunset-period offerings. Notably, even in the month of November, Life Insurance Corporation reported 104% growth in individual APE due to the sunset period of a couple of its products.

Private sector’s performance

ICICI Prudential Life reported 5% y-o-y decline in individual annualised premium. While growth revived to 18-20% y-o-y in October and November 2019, it moderated in December to 8% y-o-y. Lower unit-linked insurance plans (Ulip) volumes continue to drag overall growth in 3QFY20; it appears that the trend is playing out in January 2020 as well. On considering overall (individual and group) adjusted APE including accrued but not received premium, its APE, was down 4% y-o-y (muted at +4% y-o-y in December 2019).

HDFC Life reported 12% y-o-y growth in individual APE; moderating from 43-46% y-o-y growth observed over the past few quarters, most likely led by a slowdown in the non-par business. The newly-launched participating product likely supported growth through the bancassurance channel in Q3FY20. Overall APE was up 13% yoy on the back of 27% y-o-y rise in group business, likely reflecting higher growth in group credit business.

SBI Life’s individual APE growth was up 17% y-o-y. Growth revived in November-December 2019 to 17-22% post three months of muted 3-14% y-o-y growth, translating to 15% in Q3FY20 and 19% in 10MFY20. Management has guided for about 20-22% growth for FY2020E. The current trend suggests that the company may just about make it to 20%, unless it aggressively pushed unit-linked insurance plans through the agency channel- a repeat of Nov-Dec 2019.

Max Life’s growth in individual APE was moderate at 15% y-o-y. Similar to other players, growth softened in January 2020 post recording 17-23% y-o-y growth over the past two quarters. Ticket size in individual non-single segment was up by 18% y-o-y (up 2% m-o-m). The company has focused on improving productivity of active agents; as such overall individual agents have declined by 3,473 (y-o-y) to 40,910. Bajaj Life and Tata AIA reported strong growth in individual business at 21%.

Edited extracts from Kotak Institutional Equities Research report

Do you know What is ? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Life insurers report 18% premium collection growth in January
2Want to cover outpatient expenses? You may try this new plan of Star Health
3Bajaj Allianz General Insurance launches Health Infinity with unlimited sum insured – Check details