The life insurance industry reported flat premium growth in June as its individual annual premium equivalent (APE) stood at 4.1% year-on-year at Rs 4,733.2 crore. However, private players posted an individual APE growth of 8.9%, while Life Insurance Corporation of India (LIC) – the country’s largest insurer – achieved a 1.3% dip in growth, data from Edelweiss showed.
In the last three months, the industry growth has been very slow as compared to last year, when it had seen high double-digit growth in individual APE. “All in all, Q1FY19 growth momentum turned out to be softer at <6% YoY with private players posting subdued growth of <5% YoY and LIC 7% YoY. While the overall growth momentum seems to be moderating (partially due to base effect), we maintain that predisposition towards financial savings will persist and the industry will regain momentum,” says the Edelweiss report.
It also added that growth in Q1FY19 has been soft, largely on a higher base.
Industry participants say that business in the first few months of a financial year is usually low; it only picks after the first quarter of the fiscal.
Players like Bajaj Allianz, Birla Sun Life, Max Life Insurance, HDFC Standard Life Insurance, Reliance Nippon Life, DHFL Pramerica continued to see its APE growth in positive. “Due to the correction in equity markets industry has seen lower growth in unit lined insurance plans (ULIPs), while there is no major growth in the traditional segment. We hope that going forward, we will continue to see demand of both ULIPs as well as traditional products,” said top official from the leading insurance company.
According to data from the Insurance Regulatory and Development Authority of India (Irdai), first year premiums of the life insurance companies in June surged by 14.83% at Rs 16,611.57 crore against Rs 14,466.13 crore in the corresponding period a year ago.