New business premiums of life insurers rose to 7.5% in FY21
- The year ended with a 3% growth rate in retail annualized premium equivalent of ₹75,658.06 crore
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NEW DELHI :Indian life insurance industry capped FY21 with a 7.5% increase in new business premiums (NBP) to Rs2,78,277.98 crore (Rs2.78 trillion) compared with Rs2,58,896.48 crore in FY20, ending the year with a 3% growth rate in retail annualized premium equivalent (APE) of ₹75,658.06 crore. APE is s a combination of regular premium business plus 10% of the single premium business.
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"As expected, March was a big month for the industry, adding a significant push to finish a year that was nothing short of tumultuous. March 2021 began with the industry flat to LY (low yield) in NBP terms but down almost 8% on APE terms, led by LIC’s APE being down over 15% to last year. But a strong finish by LIC helped push the industry into positive territory even in APE terms," said Snehil Gambhir, partner and director, Boston Consulting Group.
While post lockdown saw Banca-led players face severe headwinds, the larger players have turned things around considerably. Gambhir said, "HDFC Life and Max Life have been recording improvements month-on-month and have posted healthy 17%+ and 19%+ growth in retail premiums respectively on an APE basis for the year. TATA AIA is the only insurer in the Top 10 that has recorded positive growth each month with an impressive ~27% growth in retail APE premium. Among agency-led players, Bajaj Allianz has also had a stellar year clocking ~28% retail APE growth. The other top performers among the larger players were Aditya Birla SunLife with ~14% growth and Kotak Life with about 11%. After a slow start in the year, behemoth SBI Life, finished the year with a 4% growth in APE, ending the year again as the leader in the private industry with FY21 Retail APE of over Rs10,200 crore and total new business premiums across group and retail of Rs20,625 crore. State-owned LIC clocked retail APE of over Rs30,466 crore."
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ICICI Prudential and HDFC Life led the industry in market share in terms of sum assured coverage—a key measure in the quantum of protection cover being sold, with 12.5% and 11.7% respectively. SBI Life with 10.6% was close behind. Max Life and TATA AIA Life continued to fare well with over 6% each of the share.
“A few insurers with strong execution capability, a highly resilient team, balanced product and distribution mix, have carved out an advantage for themselves. This advantage in adversity will hold them in good stead as the country grapples with the economic and health shocks, courtesy the second wave of coronavirus infectious disease," said Gambhir.
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