In October, the Indian life insurance Industry clocked a double-digit growth (first time in the last 12 months) of 35.7% year-on-year (y-o-y) in the total annual premium equivalent (APE). The growth was largely contributed by strong inflows in first-year premiums.
Private companies, for the first time in the last six months, witnessed a strong growth of 29.6% y-o-y due to heavy inflows in the group premium category (up by 199% y-o-y), but government-owned Life Insurance Corp. of India (LIC) continues to hold growth momentum as its APE grew 45% y-o-y.
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However, on year-to-date (YTD) basis, private insurance providers reported a decline of 7.9%.
Cumulatively, all private firms mobilized Rs16,200 crore in the first-year premiums during the first seven months of FY10 vis-a-vis Rs17,800 crore during the same period in FY09.
Private firms merely contributed to the industry growth, as their APE was up by just 1%. However, LIC outperformed the them and industry by posting an APE growth of 16.7% on a month-on-month (m-o-m) basis. Among private insurers, ICICI Prudential Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd and Max New York Life Insurance Co. Ltd posted double-digit growth on m-o-m basis.
SBI Life continued to hold the top position in October. It gained the most among the private insurers with a growth of 129.8% y-o-y and 18.6% on a YTD basis. The growth was mainly on account of strong inflows in the group non-single premium category. The underwritten premium saw a seven-fold jump in the last one year. In October, it collected Rs300 crore against Rs40 crore last year.
Among the top 10 private firms, only three reported decline in APE in October. Kotak Mahindra Old Mutual Life Insurance Ltd lost the most with a decline of 32.8% y-o-y. Other two were MetLife India Insurance Co. Ltd (down by 8.9% y-o-y) and Bajaj Allianz General Insurance Co. Ltd (down by 11.3% y-o-y).
Other than SBI Life, two small insurers saw robust growth—Tata AIG (APE up by 74% y-o-y) and Max New York Life (APE up by 58% y-o-y).
On YTD basis, the APE market share of private firms against LIC was at 56:44 against 63:37 in the first seven months of FY09. The APE market share of LIC has witnessed a significant rise of 700 basis points on YTD basis.
Among the private firms, the biggest loser in the APE market share on YTD basis was ICICI Prudential Life with a market share of 16.4%. It saw a decline of 424 basis points compared with the last fiscal. It was the worst hit as its first-year premium declined by 33% in the first seven months of FY10 vis-a-vis the corresponding period last year.
It mopped up premiums worth Rs250 crore in the first seven months of FY10 vis-a-vis Rs380 crore last year.
Graphics by Yogesh Kumar / Mint