Life Insurers Continue Double-Digit Premium Growth In June

Indian life insurers’ double-digit premium growth continued in June on the back of strong performance by private players.

The annual premium equivalent—sum of annualised first-year premiums on regular policies and 10 percent on single premiums—grew 36 percent year-on-year last month, according to data compiled by BloombergQuint from the Insurance Regulatory Development Authority of India. Premium growth for private life insurers stood at 22 percent.

The growth for private insurers came on a reasonable base growth of 8 percent in June 2018, indicating a stable trend for the past five months in spite of market volatility, Nomura said in its report.

The industry, on an unweighted basis, witnessed a near doubling of premiums—94 percent yearly growth in June 19—led by Life Insurance Corporation of India’s 133 percent year-on-year growth in new business premium.

Private insurers continue to deliver a strong growth with the increasing protection share in the business mix, Nomura said.

• ICICI Prudential Life Insurance Company Ltd. reported 1 percent year-on-year growth in new business annualised premium equivalent on a subdued base.
• While protection momentum remains strong and will aid of new business growth, Nomura expects ICICI Prudential Life to take more time to diversify from its dependence on high-ticket unit-linked insurance plans.
• SBI Life Insurance Company Ltd.’s growth was driven by a 25 percent jump in the number of policies sold in June.
• HDFC Standard Life Insurance Company Ltd. reported 87 percent growth in new business in the previous month, largely driven by the Sanchay Plus scheme which led to a rise in the average ticket size, the brokerage said in its report.

JM Financial Services expects the industry to grow on the back of increasing awareness about protection, tech-enabled distribution and reduced competition from other saving products, especially term deposits as rates fall.