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Life Insurance September’20 - Sector is moving towards recovery
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The sector had seen their first year premium decrease at 18.6 per cent to Rs. 49,335 crore in Q1FY21 from Rs. 60,637 crore in Q1FY20, and on the other hand, Q2FY21 reported an increase of 15.8 per cent to Rs. 75,392 crore from Rs 65,121 crore in Q2FY20 which is indicative that the sector is recovering.

1. New business premiums for the life insurance industry witnessed a growth of 26 per cent in September at Rs 25,366.3 crore, compared with Rs 20,056.7 crore in the same month last year. However, the growth of new premiums for the six months of the current financial year continued to remain negative with a fall of 0.82 per cent, premiums of Rs 1,24,728 crore received compared with Rs 1,25,758 crore in previous financial year .

The comparison of last 6 months data on YOY basis is as follows:

2.  LIC saw a fall of 2.18 per cent in its new business premium at Rs 88,018.01 crore in this fiscal, against Rs 89,980.22 crore in the previous financial year, whereas it reported growth of 41.7 per cent in H1 FY20.

3.  Private players like Tata AIA Life Insurance, SBI Life Insurance, Max Life Insurance, HDFC Life Insurance, among others, witnessed a positive growth in new business premiums this fiscal till September. 

Trend - First year Premium Basis

 

4.  The market share of LIC and the private life insurers was at 70.57 per cent and 29.43 per cent respectively. 

5.  SBI Life with 11.7 per cent remained the largest private insurer in terms of individual WRP, followed by HDFC Life 9.9 per cent and ICICI Prudential Life Insurance 6.6 per cent. On an unweighted basis SBI Life was the largest private insurer with a market share of 7.2 per cent, followed by HDFC Life with 6.9 per cent and ICICI Prudential Life with 3.6 per cent.

6.  As business activity started unlocking, the industry has witnessed an improvement in APE in Sep’20. The industry reported APE growth of 6.1 per cent − first month of growth since Feb’20. Private insurers reported APE growth of 13.1 per cent.

Overall Market share across differennt segments

 

No. of Policies / Schemes

No. of lives covered under Group Schemes

Sum Assured

Market Share (%)

Growth (YOY %)

Market Share

Growth (YOY %)

Market Share

Growth (YOY %)

LIC of India

67.82

-3.12

18.92

30.08

14.28

21.88

SBI Life

6.59

6.87

7.27

123.42

10.68

14.15

HDFC Life

4.89

21.27

17.91

-40.69

11.06

-45.71

ICICI Prudential Life

3.06

-17.29

10.16

-34.97

12.51

51.29

Max Life

3.12

2.13

2.72

-41.79

8.81

-4.06


The demand for term plans has gone up in the last few months due to the ongoing pandemic, as people have now become aware of the need to have term insurance. Life insurance industry is witnessing a sharp uptake in single premium policies, as many policyholders don’t want to commit investments for the longer duration. Although With a decline in demand for unit linked insurance plans (ULIPs), a decline in the share of private life insurance companies is expected but overall insurance segment is expected to be normalize towards Q4 of FY 21.

 

Disclaimer

The author may have positions in the stocks as mentioned in the article above, please assume us to be biased. This is not a recommendation to buy or sell securities. This is purely information about the company mentioned.  Equity investing contain risks and please consult your financial adviser for any buy and sell securities!

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