Life Insurance: Premium collections grow 6.1% in September

WITH business activity restarting, the insurance industry has witnessed an improvement in annualised premium equivalent (APE) in September 2020. The industry reported APE growth of 6.1% — the first month of growth since February this year. Private insurers reported APE growth of 13.1%, whereas LIC posted a marginal decline of 1.4%.
Private players recorded 13.1% year-on-year (y-o-y) growth in APE, compared to an 8.3% decline in August. Retail APE for private players grew 3.6% (vs. down 5.8% in August). Group APE saw a strong performance with 70.5% growth y-o-y (vs. 20.9% decline in August 2020).

Private insurers
The share of private players on a total APE basis improved sequentially, with private insurers reporting 54.8% share (46.8% in August) against the peak of 60.2% in February. Private players have reported their best performance since the lockdowns began. The share of retail APE stood at 62.7% against 54.4% in August, whereas the share of group APE was volatile and stood at 37.5% against 25.5% in August 2020.

HDFC Life reported 41.6% y-o-y growth in APE in September to Rs 7.4 billion, backed by strong retail as well as group APE. Retail APE at Rs 6.1 billion grew 43.2% y-o-y. New business premium (NBP) at Rs 20.3 billion grew 55.2% y-o-y, continuing its strong trend from July. Policy sales increased by 21.3% y-o-y. The retail APE ticket size rose 17.2% y-o-y in September, indicating the continued revival of Par (participating policies) and ULIP segments.

ICICI Prudential Life Insurance reported 24.1% y-o-y growth in APE to Rs 8.7 billion on a received premium basis in September. Retail APE declined 23.9% y-o-y to Rs 4.4 billion but group APE grew 252% y-o-y to Rs 4.3 billion. Policy sales dropped 17.3% y-o-y in September, while the retail APE ticket size decreased by 8.4% y-o-y, showing sluggishness in ULIP demand.

\Max Life reported APE growth of 15.2% y-o-y to Rs 4.4 billion. Retail APE grew by 16.3% y-o-y to Rs 4.2 billion. NBP grew by 21.3% y-o-y to Rs 6 billion. Policy sales increased by 2.1% y-o-y, while the ticket size increased by 14% y-o-y.
SBI Life reported a 0.2% y-o-y growth in APE to Rs 9.8 billion in September. Retail APE fell 4.4% y-o-y to Rs 8.4 billion. NBP increased by 18% y-o-y to Rs 22.3 billion. Policy sales increased by 6.9% y-o-y, while the ticket size fell 10.8% y-o-y.

Performance of LIC
Life Insurance Corporation of India (LIC) has reported flat numbers with a 1.4% y-o-y decline in APE. Retail APE grew by 4.8% y-o-y to Rs 23 billion. NBP increased by 30.1% y-o-y to Rs 166 billion. Policy sales declined by 3.1% y-o-y, while the ticket size improved by 2.1% y-o-y.

Edited extracts from Emkay Global’s Insurance Tracker