Growth slowed down for private insurance companies with individual APE (annual premium equivalent) business increasing 11% year-on-year (y-o-y) in February. Private life insurers recorded a 28% y-o-y growth in individual APE business during the 11 month timeframe for 2017-18. The slowdown was led by ICICI Prudential Life which de-grew by 16% y-o-y due to high base effect.
However, HDFC Standard Life and Max Life have grown steadily at 22% and 33% y-o-y respectively. New business collection for the life insurance industry in APE terms went up 13% y-o-y in February. High growth was seen in group businesses of HDFC Standard Life and SBI Life, which saw robust increase in group term and group credit life segments.
The average premium per policy, however, continues to increase for private players. This is largely because many private insurers have been seeing good growth in high ticket size ULIPs(unit-linked insurance plans). While LIC’s (Life Insurance Corporation) ticket size has decreased as it grows its low-margin group business, the share of private insurers in this category has declined in total policy volumes to 24% from 29% in December 2017.
“Average ticket size for private players is quite high compared to LIC as they have been growing strongly in ULIPs,” analysts at brokerage firm Prabhudas Lilladher said.
Though LIC’s market share improved slightly to 47% during February it has declined 2% so far in 2017-18. The market share of top-five private players – SBI Life, ICICI Prudential Life, HDFC Standard Life, Max Life and Kotak Life – has improved by about 4.3% to around 69% pointing towards continued polarisation of the industry “We note that among the top five private players the bulk of the market share gains has been captured by SBI Life and HDFC Life.