New Delhi:
The new business premium of life insurance industry contracted by 3 per cent year-on-year to Rs 24,383.42 crore in December.
The new business or the first-year premium of 24 life insurance companies was Rs 25,079.89 crore in the same month of 2019.
LIC's new business premium declined by 15 per cent from Rs 16,861.98 crore in December 2019.
The cumulative new business premium from all the insurers during the April-December period of 2020-21 contracted by 1.7 per cent to Rs 1,91,046.39 crore compared to Rs 1,94,331.10 crore a year earlier.
The country's largest life insurer Life Insurance Corporation(LIC) contributed Rs 14,345.70 crore or 58 per cent to the total premium generated during the month, showed data from the Insurance Regulatory and Development Authority of India (Irdai).Private sector comprising of 23 players registered a growth 22 per cent by earning new premium of Rs 10.037.72 crore in December, as compared to Rs 8217.91 crore in the year-ago period.
“The month of December was a positive one for most life insurers. While the private life insurance industry has grown by 3% YoY, Max Life has registered a robust 18% growth in Individual Adjusted FYP, making the company one of the top players with a positive outlook for the month. Max Life has also recorded its highest-ever sales for December, which has been driven by an impressive performance across Banca, Agency, and e-commerce channels. In terms of YTD performance, Max Life now holds a 10.6% market share amongst the private life insurers with an improvement of 158 bps. Our continued focus on helping customers secure the future of their loved ones in uncertain times has led to this notable performance which we aim to take ahead in the new decade as well.”
Among private sector life insurers, Bajaj Allianz Life's new business rose maximum by 64.18 per cent to Rs 686.80 crore in December 2020, over Rs 418.32 crore a year ago.
Aditya Birla Sun Life reported over 61 per cent increase in premium collection to Rs 514.04 crore as against Rs 318.55 crore, while India First posted a 54 per cent rise to Rs 240.10 crore.
Other insurance players like ICICI Prudential Life's new business was at Rs 1,469.45 crore (up 32.11 per cent); HDFC Life Rs 1,910.27 crore (up 27 per cent), and Max Life Rs 768.07 crore (up 21 per cent) in December.
According to an analysis by Kotak Institutional Equities,Dec 2020 was a muted month with 3 per cent yoy APE growth in private individual business, better than the 7 per cent decline in November, translating into 3 per cent year on year growth in 3QFY21 (versus 3 per cent decline in 2QFY21).
Annual premium equivalent is a measure used for comparison of life insurance revenue by normalising policy premiums into the equivalent of regular annual payments. This is particularly used when the sales contain both single premium and regular premium business.
For the domestic life insurance industry, growth in protection segment has likely moderated from peak levels observed in 1HFY21, reducing their contribution to quarterly APE and VNB.Lower share of protection and higher ULIPs quart on quarter (qoq) may trend down value of new business (VNB) while higher traditional business will provide some cushion,said the report.
The report said large private life insurers (excluding ICICI Prudential Life) have reported 5-22 percent yoy increase in APE in 3QFY21.
Increase in share of non-par traditional business will however provide some cushion. ULIP growth, a low margin business, was the likely volume driver.
“With a diversifying product and distribution mix, we retain a constructive view on the sector. SBI Life remains the best placed,'' said the report..
High base dampens LIC’s growth in 3QFY21.
The LIC reported 4 per cent yoy decline in individual APE in December 2020, marginally higher than individual APE growth for private players. Overall individual business declined 22 per cent yoy in 3QFY21 due to 54 per cent yoy decline in November 2020 (high base). Group APE was down 25 per cent yoy in December 2020 (down 19 per cent yoy in 3QFY21 and the corporation lost market share in group business in 3QFY21, down 650 bps yoy to 75%).
Prashant Tripathy,MD & CEO, Max Life Insurance said,“ Max Life has also recorded its highest-ever sales for December, which has been driven by an impressive performance across Banca, Agency, and e-commerce channels. In terms of YTD performance, Our continued focus on helping customers secure the future of their loved ones in uncertain times has led to this notable performance which we aim to take ahead in the new decade as well.”