Private life insurance companies fared well while compared to public players like Life Insurance Corporation (LIC). Many private insurance players posted growth in May, despite the pandemic. At the same time, however, LIC saw a dull business.
Private sector new business premiums (NBP) grew 14 per cent year-on-year, as per a report by Anand Rathi. The NBP for LIC was, however, down by 12 per cent year-on-year at the end of May. However, the growth in the overall market for private players was down when compared to April and March due to curbs imposed by different state governments due to the second wave of COVID-19. The NBP for private insurers market share fell 31 per cent compared to 50 per cent and 35 per cent in the preceding two months.
Separately, a report by Emkay Global Services said the insurance industry reported a weak year-on-year growth in May even when compared to the low base from last year. The retail NBP for the industry witnessed a decline of 9 per cent year-on-year, while the total NBP recorded a decline of about six per cent on a year-on-year basis. The Emkay report observes that the trend in retail sales remained better for private players and on the basis of total APE (Annualized Premium Equivalent), the share of private players decreased to 50 per cent in May from 60 in April.
The report from Emkay Global expects an improvement from Jun due to gradual reopening of major cities across states with the base effect advantage of last year remaining intact.
Experts from Anand Rathi opine that among the life insurance players, HDFC Life occupied one of the top most positions in the market among the private players. In APE, HDFC Life occupied the number one position in the private space with a 20.5 per cent market share followed by SBI Life with a 16 per cent market share. This was followed by ICICI Prudential with a 13.8 per cent market share. Other private players such as Max Life and Bajaj Allianz Life gained market shares whereas Tata AIA Life and Aditya Birla Sun Life lost market shares in May.
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The Anand Rathi report further says that HDFC Life led with a 23.2 per cent market share in new business premiums followed by ICICI Prudential with a 16.2 per cent market share in the same category and followed by SBI Life with a 16.1 per cent market share. In NBPs, private insurers such as Max Life and Bajaj Allianz Life increased their market shares whereas Tata AIA Life lost market shares.
On the other hand, experts from Motilal Oswal highlight that the combined market share of listed players such as SBILIFE, ICICI Prudential Life, HDFC Life and MAX LIFE on an individual weighted received premium (WRP) basis stood at 60.2 per cent in May versus 61 per cent for the whole of last financial year. Experts from Motilal Oswal observe that Tata AIA, Bajaj Allianz and Birla Sun Life are getting firmly positioned among the top five to seven large private insurers in the country on an individual WRP basis.
Although rising Covid-19 cases and lockdown in key states could impact overall growth in the near term, they expect premium growth to see strong traction in the market in the overall FY22 with a continued focus on non-participating or annuity plans and the protection segment. On the other hand, ULIP plans are also expected to witness a gradual recovery.
