ICICI Securities: Term Pricing - Insurers Weighing Volumes Versus Margins
A person filling SBI Life Insurance form. (Source: BloombergQuint)

ICICI Securities: Term Pricing - Insurers Weighing Volumes Versus Margins

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ICICI Securities Report

Term protection pricing has witnessed periodic revisions in FY21-to-date against the backdrop of higher reinsurance rates and higher consumer demand.

We witnessed price hikes of 10-41% by ICICI Prudential Life Insurance Company Ltd., 6-39% by HDFC Standard Life Insurance Company Ltd., 9-18% by Max Financial Services Ltd. and no price change by SBI Life Insurance Company Ltd., between April and August 2020.

Starting September 2020, ICICI Prudential Life Insurance has introduced a lower-priced product with fewer features.

Key observations are:

In the absence of any price hike, relative pricing-driven positioning continues to be most attractive for SBI Life (traditionally it has operated at a premium to peers).

Insurers will face a volume vs margin conundrum; those that experience weaker volume growth can lower pricing, and vice versa.

Absolute value of new business will depend on a combination of growth and margin.

Click on the attachment to read the full report:

ICICI Securities Life Insurance Price Tracker Sep20.pdf

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