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