Just 1% growth in pre­mium for pvt in­sur­ers in Apr-May

Financial Chronicle - - FRONT PAGE - FC BUREAU

FOR pri­vate life in­sur­ers, fi­nan­cial year 2018-19 started on a flat note as they recorded a mere one per cent growth in in­di­vid­ual new busi­ness pre­mium in the first cou­ple of months.

Pri­vate life in­sur­ers un­der­wrote an in­di­vid­ual ad­justed first year pre­mium of Rs 3,458 crore in April and May this year com­pared to Rs 3,408 crore in cor­re­spond­ing pe­riod of last year, ac­cord­ing to monthly data re­leased by Life In­sur­ance Coun­cil. The new busi­ness pre­mium in the pre­vi­ous year had wit­nessed strong growth on ac­count of de­mon­eti­sa­tion-re­lated in­flows.

ICICI Pru­den­tial Life In­sur­ance (-31 per cent growth) and Ba­jaj Al­lianz Life In­sur­ance (-6 per cent), which were the big­gest ben­e­fi­cia­ries of note ban re­lated in­flows, saw neg­a­tive growth with in­di­vid­ual ad­justed first year pre­mium equiv­a­lent (APE) of Rs 739 and Rs 179 re­spec­tively.

SBI Life In­sur­ance grew by just 9 per cent with an in­di­vid­ual ad­justed first pre­mium of Rs 667 crore. HDFC Life, how­ever, re­ported a ro­bust 30 per cent year-onyear growth to Rs 497 crore on ac­count of the low base last year.

APE is a global way of cal­cu­lat­ing new busi­ness as it takes into ac­count 10 per cent of new busi­ness sin­gle pre­mium and 100 per cent reg­u­lar pre­mium.

Karni Singh Arha, chief fi­nan­cial of­fi­cer at Aviva Life In­sur­ance, ex­plained, “In 2017-18, pri­vate life in­sur­ers had grown by 18 per cent. Bar­ring the top three play­ers, the growth was 25 per cent for mid-sized and small play­ers. Post de­mon­eti­sa­tion (on Novem­ber 8, 2016), the in­flows into life in­sur­ance in­creased. If you see the cash con­tri­bu­tion for buy­ing in­sur­ance poli­cies was high and a large part of new sales were sin­gle pre­mium plans in 201617 com­pared to 2017-18.”

“Post Union bud­get with the in­tro­duc­tion of longterm cap­i­tal gain tax on mu­tual funds, life in­sur­ance cap­i­talised on it and have sold Ulips and sin­gle pre­mium plans in Fe­bru­ary and March. Any­ways the first quar­ter is also the weak­est quar­ter in terms of new busi­ness pre­mium,” added Arha.

Pri­vate in­sur­ers saw a fall in mar­ket share to 52.5 per cent this year com­pared to 55.2 per cent dur­ing the two months of last year.

On the other hand LIC reg­is­tered a 13 per cent growth dur­ing the pe­riod un­der re­view to Rs 3,127 crore.

On an un-weighted ba­sis, the in­dus­try re­ported 13 per cent growth in new busi­ness pre­mi­ums to Rs 9,348 crore, led by LIC which grew by 16 per cent to Rs 5,187 crore. Pri­vate in­sur­ers wrote a lot of loss mak­ing group in­sur­ance busi­ness and re­ported a 16 per cent growth in it to Rs 2,397 crore while LIC stayed away from this seg­ment dur­ing the two months of this year.

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