Their market share grew to 56% in FY18; premium growth in March was muted owing to a strong base
Indian insurers’ premiums grew 19% y-o-y in FY18 vs. 21% y-o-y last year. Private sector grew 24% y-o-y vs. 26% y-o-y last year; market share improved further to 56% vs. 54% last year. SBI Life replaced ICICI Pru as the largest life insurer. Premium growth in March 2018 was muted against a strong base.
IRDA has reported life insurance premium income data for insurers for March 2018/FY18
Industry individual premiums, on an APE basis, grew a strong 19% y-o-y in FY18 compared to 21% y-o-y growth last year. For the month of March 2018, premium growth was muted at 7% y-o-y vs. 10% y-o-y last month, mainly owing to a strong base (25% y-o-y in the month of March 2017).
Private sector market share gains continue for sixth year in a row
At 56% in FY18, the market share is now near its its highest ever (57% in FY09). The composition within the private sector is much different, however; the top three bankbacked insurers (HDFC Life, ICICI Prudential, and SBI Life) now make up 56% of the private sector vs. 39% in FY09.
For the third consecutive year, SBI Life grew fastest among large bank-backed insurers
SBI Life posted 31% y-o-y in FY18 vs. 39% y-o-y last year (35% CAGR during FY16-18). HDFC Life grew 31% y-o-y vs. 9% y-o-y in FY17. IPru Life grew 16% y-o-y after strong growth in FY17. Kotak Life grew 31% y-o-y vs. 28% y-o-y last year. Max Life grew 22% y-o-y vs. 25% y-o-y last year. Tata AIA improved its rank in the private sector to #6 vs. #9 in FY16. It has been the largest market share gainer over the last three years (from 1.2% in FY15 to 3.9% among private insurers in FY18) after SBI Life. Among agency-based insurers, Bajaj Life growth was strong. Reliance Life and Birla Sunlife lost market share in FY18.
Premiums for the month of March 2018 were muted given strong base
They stood at 8% y-o-y vs. 11% y-o-y last month. IPru Life grew +17% y-o-y, after three consecutive months of decline. HDFC Life premiums declined 2% y-o-y vs. +22% y-o-y last month, driven by strong growth in the base month . SBI Life grew 5% y-o-y; Max Life grew 16% y-o-y; Kotak Life grew 13% y-o-y; Reliance Life grew 6% y-o-y; Bajaj Life grew 5% y-o-y. Premium growth at Birla Sunlife accelerated to 20% y-o-y.
We expect growth in private sector premiums to moderate to mid-teens over the next couple of years
Large bank-backed insurers are likely to grow at a faster pace and continue to gain market share. We cite help from an improving macro climate, an accelerating share of financing savings, improving financial inclusion, and a stabilising regulatory environment.