Life insurers report 18% premium collection growth in January

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Published: February 12, 2020 1:30:47 AM

Total annualised premium equivalent (APE) for the industry stood at Rs 10,285.3 crore in January, a year-on-year increase of 41%, according to data from Kotak Institutional Equities .

The growth in January was led by Life Insurance Corporation of India (LIC) which saw its APE at Rs 5,826.1 crore, a y-o-y growth of 79%, while private players saw their APE at Rs 4,459.2 crore, a surge of 11% y-o-y.The growth in January was led by Life Insurance Corporation of India (LIC) which saw its APE at Rs 5,826.1 crore, a y-o-y growth of 79%, while private players saw their APE at Rs 4,459.2 crore, a surge of 11% y-o-y.

The domestic life insurance industry registered strong growth in January, led by strong performance in both individual as well as group categories. The industry achieved first-year premium collections worth Rs 20,623.01 crore in January compared to Rs 17,419.76 crore in the same month in the previous financial year, a growth of 18.39%, data from Insurance Regulatory Development Authority of India (Irdai) showed.

Total annualised premium equivalent (APE) for the industry stood at Rs 10,285.3 crore in January, a year-on-year increase of 41%, according to data from Kotak Institutional Equities .

The growth in January was led by Life Insurance Corporation of India (LIC) which saw its APE at Rs 5,826.1 crore, a y-o-y growth of 79%, while private players saw their APE at Rs 4,459.2 crore, a surge of 11% y-o-y.

“LIC gained significant market share with 99% y-o-y growth in individual 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,” said Kotak Institutional Equities in its report. APE is the sum of annualised first year premiums on regular premium policies, and 10% of single premiums, written by insurance companies during any period from both retail and group policyholders.

Between April and January, total APE of the industry increased 24% y-o-y to Rs 74,367.6 crore, while y-o-y growth of total APE for LIC and private insurers was at 34% and 16% respectively. According to the Kotak Institutional Equities, their channel checks suggest that LIC’s 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, LIC reported 104% growth in individual APE due to the sunset period of a couple of its products.

Deadline given by insurance regulator was till January end when all the life insurance companies had to comply with new products guidelines which had bought regulation changes in life insurance products. In January, new business premium for individual non-single insurance stood at Rs 9,136.66 crore compared to Rs 6,144.71 crore in January 2019, a growth of 48.69%. While new business premium for both group single and non-single premium stood at Rs 8,146.56 crore in January this year as against Rs 7,805.42 crore in previous financial year.

Rushabh Gandhi, deputy chief executive officer of IndiaFirst Life says, “While individual non-single premium continued to grow, however, large part of the group business in fuelled by this overall growth in protection business. A large part of the group business which is growing is because of the enhanced focus on protection business by most of the organisations.”

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