Private life insurance companies seem to be on a secured path to growth

Agencies

Private life insurers experienced reasonable growth in the July-September quarter (second quarter, or Q2) of 2023-24 (FY24), and the October data is also encouraging. The individual weighted received premium (WRP) for private players grew by 19.8 per cent year-on-year (Y-o-Y) in October.

However, Life Insurance Corporation (LIC) of India had slower growth, pulling the industry growth rate down to 13 per cent Y-o-Y. Over April-October, private insurance players grew by 13.6 per cent Y-o-Y.

Among listed players, HDFC Life (including the Exide Life merger) posted 16.5 per cent Y-o-Y growth in October.

Max Life and ICICI Prudential Life posted strong Y-o-Y growth of 37.6 per cent and 21.1 per cent, respectively, whereas SBI Life clocked a 16.4 per cent growth Y-o-Y.

Mid-sized unlisted players Tata AIA/Bajaj Allianz reported growth of over 20 per cent. LIC reported a 1.7 per cent Y-o-Y growth in Individual WRP (4.7 per cent in September).

Over April-October, the individual WRP for LIC was flat Y-o-Y. After reporting strong growth in March, the industry witnessed a slowdown over April-October.

The dip in performance is due to a large volume of purchases in March before the Budget became applicable.

Growth momentum in FY24 could be lower, especially since 2022-23 (FY23) was strong, creating a base effect.

LIC s market share in WRP terms improved to 33.5 per cent in October.

SBI Life (16.3 per cent) remains the largest private insurer in terms of Individual WRP over April-October, followed by HDFC Life (10.6 per cent) and Tata AIA (6.6 per cent). Even on an unweighted basis, SBI Life was the largest private insurer, with a market share of 10.3 per cent, followed by HDFC Life (8.3 per cent) and ICICI Pru Life (4.7 per cent).

In terms of annualised premium equivalent (APE), private players reported 21 per cent growth in overall APE in October, which is at the higher end of recent month s growth rates. ICICI Pru Life was up 21 per cent on a low base, whereas HDFC Life (17 per cent) and SBI Life (16 per cent) were relatively weaker.