Life insurance sector needs to maintain growth momentum

Life insurance companies put up a decent show in the month of June. As per the monthly data from Life Insurance Council, the overall annualized premium equivalent (APE), a key metric of growth for insurance companies, grew by 9% year-on-year (y-o-y) in June. Within this, the individual APE has risen by 3.2% y-o-y. Further, June saw diverging trends between Life Insurance Corp. of India (LIC) and private companies. In terms of individual APE, LIC saw an 11% drop y-o-y. In contrast, private life insurance companies have delivered a growth of 12% y-o-y. Analysts expect the monthly trends to improve further for the overall life insurance sector.

Among key listed private insurance companies, HDFC Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd and Max Financial Services Ltd have registered strong growth in the individual APE segment in the range of 12.3% to 17.6%. “Private life insurance companies’ retail (individual) APE performance was good for the month of June driven likely by their respective product mix and distribution channel mix, especially from their bank channel partnerships,” Avinash Singh, analyst, Emkay Global Financial Services, said. SBI Life Insurance Co. Ltd saw a relatively slower growth of 5.2% y-o-y for June.

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