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NEW DELHI: Life Insurance Corporation (LIC) reported a 13% decline in individual annual premium equivalent (APE) in May. While the company had reported a 3% decline in its premium collection in May last year, better than the 33% decline reported by private players, it lost out to them last month with a 22% decline, according to a report issued by Kotak Institutional Equities.

As per the report, private life insurers reported weak individual APE growth at 5% year-on-year (YoY) in May, which, however, comes on low base. Two-year individual APE CAGR decline at 16% is similar to trends observed in April 2021, a result of the impact of lockdown-related disruptions.

"ICICI Prudential Life (up 28% YoY in individual business), Bajaj (up 32%) and HDFC Life (up 17%, 22% on an overall basis) were strong, Max Life was up 12% and SBI Life was down 6%," as per the report.

ICICI Prudential Life’s individual APE growth at 28% YoY was significantly higher than 5% average rise for private players; overall growth was lower at 15% due to a 43% decline in group business. A normalised base and strong growth from new bancassurance partnerships were the likely drivers.

On a 2-year CAGR basis, individual APE was down 22%. "We expect strong growth trends incrementally, reflecting channel and product mix diversification," said the report.

HDFC Life reported 17% YoY growth in the individual business and 22% growth in overall APE, as the group was up 120%. Two-year individual APE saw a 12% compounded decline, better than the 16% decline for private players. HDFC Life’s ability to toggle between product classes and continued focus on product innovation, however, helped it outpace most of its private-sector peers over FY2017-21.

SBI Life reported a 6% YoY decline in individual APE in May 2021, again on a low base. The company was down 29% on a 2-year CAGR basis versus a private sector decline of 16%. The impact of lockdown-related disruptions on SBI Life’s business was higher in April 2020 - two-year individual APE CAGR decline of 36% compared to 16% for private players.

"We would like to highlight that SBI Life had a 0.5-5% lower market share in May for individual APE in any year compared to the annual market share (since FY2010)," as per the report.

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