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Life Insurers’ Premium Growth At 22-Month High

Life insurers’ annual premium equivalent, a measure to assess revenue, grew at its fastest pace in nearly two years in April on the back of a low base.

The annual premium equivalent grew at 27 percent year-on-year last month—the highest since July 2017—compared with 1 percent in April 2018, according to data compiled by BloombergQuint from Life Insurance Council.

Private insurers reported a 34 percent growth in annual premium equivalent in April against 1 percent in the year-ago period. Life Insurance Corporation of India’s growth, too, recovered to 19 percent from 1 percent last year.

Market Share

The share of private life insurers continued to rise in April at the cost of LIC.

Private insurers now have a market share of 57.2 percent—a rise from 54.3 percent last year. Share of India’s largest insurer, however, dropped to 42.8 percent from 45.7 percent, according to data released by Life Insurance Council.

“SBI Life and HDFC Life gained most of the 285-basis-point market share lost year-on-year by LIC,” JM Financial said in a report. The industry’s annual premium equivalent, it said, is expected to grow at an annualised rate of 16 percent over financial years 2019-21. Private insurers will witness a compounded annual growth rate of 17 percent because of increased awareness, product innovation, investment into online or direct distribution channels and expected revival in capital markets, leading to more sales of unit-linked insurance plans, according to the report.

Morgan Stanley, too, expects the year-on-year growth in premium of private insurers to be in mid-teens over the next two years against 9 percent in the last fiscal. Improving macro factors, increasing share of financial savings, greater financial inclusion and a stabilising regulatory environment will boost growth, it said in a report.