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Private Life Insurance Companies Reported Robust Growth In Premium

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Private life insurance companies have reported a growth in individual Annualised Premium Equivalent (APE) over the last few months. The figures went up to 39% in August (y-o-y), 31% in July (y-o-y), and 16% in June (y-o-y) on a low base of 6% fall in August 2020 (y-o-y), and 7% fall both in July 2020 (y-o-y), and June 2020. Hence, the low base effect and month-on-month (m-o-m) improvement trend has aided this growth. On the other hand 2-years individual APE CAGR increased to 14% in August, this year from 10% in July 2021, and 4% in June 2021. However, the group APE fell by 1% in August, this year (y-o-y), for the private players.

 
Private Life Insurance Companies Reported Robust Growth In Premium

Here are the growth rates of some major players, operating in the segment. HDFC Life reported a 17% (y-o-y) growth in the overall APE was driven by a robust 27% (y-o-y) growth in the individual APE, although the group APE was down 32% (y-o-y). The 2-years individual APE CAGR at 20% was higher than the average of private peers at 14%. ICICI Prudential Life reported a 36% (y-o-y) growth in the overall APE, driven by a 34% (y-o-y) growth in the individual APE and 59% (y-o-y) growth in group APE. Max Life, however, reported a subdued growth than other private players; the company reported a 9% (y-o-y) growth in the individual APE. The company experienced a 10% growth in 2-year individual for August, and a 6% for July, which is lower than the average for private peers at 14% and 10% boom, respectively.

Unit-linked insurance plans (Ulips) - the insurance policies that offer 'the potential of wealth creation while providing the security of a Life Cover' got robust capital markets supporting revival. Additionally, growth in non-par savings and annuity segments are the key factors behind this growth in the premium of these private players.

On the other hand, LIC, the biggest public life insurer in India has recorded a 5% in August 2021 (y-o-y) in the overall individual APE segment, which was down by 4% in July (y-o-y) and up by 1% in June (y-o-y). In the case of the private players, the base was quite lower, but LIC has a higher base, recorded in the last year. According to reports, 2-years individual APE CAGR was down by 2%, while it was down by 14% for private peers. For LIC, 18% (y-o-y) growth in group APE led to a subdued 2% (y-o-y) growth in the overall APE. However, the growth in the life insurance premium segment is indicating that the economy is gaining a modest momentum, showing an increasing trend of income generation.

Read more about: insurance lic hdfc max icici
Story first published: Monday, September 13, 2021, 16:30 [IST]
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