Life insurance industry sees 7% premium growth – Financial Express – 13th October 2018

Life insurance industry saw its annualised premium equivalent (APE) at 7% year-on-year for the first six
months of the current financial year. While private players witnessed higher growth at 13%, Life
Insurance Corporation of India (LIC) saw a growth at just 3% (year-on-year) at Rs 16,296 crore in the
period April-September, suggests the data from Kotak Institutional Equities.
Participants in the insurance industry say LIC is facing challenges in the group insurance segments in the
current financial year. The data from Insurance Regulatory and Development Authority of India (Irdai)
shows that, in the current financial year till September, LIC received first year premiums of Rs 63,480.68
crore as against `68,224.29 crore in previous financial year a negative growth of around 7%. The decline
in premium is higher in the group insurance business for LIC.
Even in the month of September, LIC
saw its APE at 5% largely due to the
fall in group insurance business. On
the other hand, insurance industry
witnessed APE at 7% and private
players at 18% for the month of
September. 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.
“Private sector individual APE continued to rise upwards, increasing 18% y-o-y in September 2018.
While HDFC Life recovered to 20% y-o-y post a few months of sluggish performance, ICICI Life was flat yo-y.
SBI Life picked up as well with 23% y-o-y growth while Max remained strong at 30% y-o-y. With
shifting focus to protection and other high-margin policies, VNB growth of large players will remain
strong and in that sense APE growth trends are less relevant,” says the report by Kotak Institutional
Equities.
Players like Birla Sun Life Insurance, Bharti AXA, Future Generali and India First continued to see its APE
growth in positive in the current financial year. “Birla SL reported 70% growth in individual APE in
September 2018, increasing market share to 2.3% from 1.5% in September 2017. This is likely driven by
making strong inroads in HDFC Bank. 59% y-o-y rise in ticket size in the individual non-single segment
during September 2018 (up 19% in 1HFY19) suggests that a large part of the growth may be from
higher-ticket ULIPs,” says the report by Kotak Institutional Equities.
Source
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The data from Irdai also shows that first year premiums in the current fiscal of life insurance companies
surged by 1.1% at Rs 93,079.03 crore as against Rs 92,065.36 crore in the corresponding period last
fiscal. Officials in the industry say that, in the past few months, growth has been coming from individual
non-single premiums and with volatile equity markets and people will stay away from single premiums
plans. Read More

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