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Premium income of life insurers falls 3% in November

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New Delhi | Published: December 14, 2018 2:42:38 AM

Annualised premium equivalent (APE) of the life insurance industry in November declined 3% year-on-year to Rs 5,733 crore.

insurance, life insuranceThe first-year premium of life insurers in November stood at Rs 14,857.77 crore, a fall of 12.58% compared to the same month last year.

The APE of life insurers in November 2017 stood at Rs 5,912 crore.Annualised premium equivalent (APE) of the life insurance industry in November declined 3% year-on-year to Rs 5,733 crore. While private players registered flat APE, Life Insurance Corporation of India (LIC) saw a fall of 7% at 2,701.3 crore, showed data released by Kotak Institutional Equities.

The APE of life insurers in November 2017 stood at Rs 5,912 crore.

The segment had witnessed a 6% APE growth between April and November, while private players registered a 11% growth.

The first-year premium of life insurers in November stood at Rs 14,857.77 crore, a fall of 12.58% compared to the same month last year. In October, the first-year premium was positive as it grew 11.58% to rs 15,480.47 crore. But in September, the life insurance companies witnessed a 16.28% decline to Rs 17,490.68 crore, showed Irdai data.

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.

According to participants in the insurance industry, LIC has been facing challenges in its group insurance segment in the current financial year. The Irdai data showed till November in the current financial year, LIC received first-year premium of `83,148.64 crore, against `90,314.25 crore in the previous financial year, a negative growth of around 7.93%. The decline in premium is higher in the group insurance business for LIC.

“The slowdown in retail investor appetite for capital market investments is reflecting in inflows to the sector. In November 2018, private sector individual APE was almost flat as compared to 17-19% growth over the past three months. We expect near-term volumes to remain weak though higher growth in the protection business makes top line growth less relevant,” says the Kotak Institutional Equities report.

Players like Birla Sun Life, Bharti AXA, SBI Life and Tata AIA continued to post positive APE growth in November.

“HDFC Life reported 20% a Y-o-Y decline in individual APE after a strong (37% Y-o-Y) growth in October; ticket size in individual non-single business was down 24% MoM likely indicating that the slowdown was in ULIPs. The company expects its growth trajectory to remain moderate over the next few months,” says the Kotak Institutional Equities.

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