Insurers’ new life premiums grow, individual single ones fall in October

Even as the life insurance industry witnessed more than 11% growth in new business premiums in October, individual single premium category fell approximately 39%, showed data from Insurance Regulatory and Development Authority of India (Irdai). Individual annualised premium equivalent (APE) rose 5% y-o-y in October compared to 11-27% y-o-y growth in April-August 2019, suggests the data from Kotak Institutional Equities.

In the last two months, individual single premium have seen fall and market participants say it is due to the volatility in equity markets as many of the investors invest in single premium unit linked insurance plans (Ulips). In September, the individual single premium category had seen a drop of 41.62%, showed the data from Irdai.

In October, life insurance industry saw new business premiums at Rs. 17,271.86 crore against Rs. 15,480.47 crore in October last year, a growth of 11.57%. Premiums for individual single premium and individual non-single premiums stood at Rs. 1,665.2 crore and Rs. 5,038.73 crore, respectively. “Private sector players reported a 5% y-o-y growth in overall APE in September, with a 4% growth in individual APE. Overall, the individual industry was up 9% as LIC reported a sharp 13% y-o-y growth,” said the report.

In the first seven months of FY20, the life insurance industry saw new business premiums at Rs. 1.43 lakh crore compared to Rs. 1.08 lakh crore in FY19, a growth of 31.84%, showed the Irdai data. Insurance industry and LIC witnessed APE at 9% and 13%, respectively, in October.

The growth in the insurance industry was largely driven by the growth in group single premium and group non-single premiums. “Overall, APE was up 9% y-o-y, with a 36% increase in LICs’ group business. ICICI Bank and HDFC Bank swapped trends as the former reported an 18% individual APE growth (up 21% overall APE) while the latter was down 15% (down 12% overall APE), partially explained by the base effect. Among major players, Tata, Max, SBI and Birla have moderated from peaks even as Bajaj held on,” said Kotak Institutional Equities report. Players like Bajaj Allianz, HDFC Life, SBI Life, Max Life and Tata AIA continued to see positive APE growth in the current fiscal.

Source: Financial Express