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


This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

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