India’s private life insurers have continued on their growth momentum in November 2021, IRDAI data reveals.
Due to low base, the growth continued but the two year CAGR has softened. The two year individual annualised premium equivalent (APE) moderated to 9 percent for private players in November 2021 from 14-15 percent over the past three months. APE is a common measure to ascertain business sales in the life insurance industry for two year individual business moderated to 9 percent . It is the sum of the regular annualized premium from the new business plus 10% of the first single premium in a given period.
The moderations is likely due to shift in ULIPs owing to market volatility even as companies continue to augment their non-par and pension portfolios, as per a report by Kotak Institutional Equities (KIE).
Further, among large players two year individual APE CAGR was strong for Max Life at 21 percent, 11 percent for HDFC Life and SBI Life. Group APE remained strong at 104 percent (excluding 38 percent SBI Life), driving 34 percent year-on-year growth in overall APE.
KIE said individual non-single sum assured to individual non-single premium ratio increased to 27 times from trough levels of 24 times in August 2021, likely reflecting some pickup in individual protection; the ratio, however, remained lower than 32 times in FY2020-21.
LIC’s overall APE growth at 25% lagged private players while individual APE was up 22% yoy; 2-year CAGR is not comparable due to high base of November 2019, it said.
Experts said inspite of Covid-19 severe waves and increased insurance awareness leading to private players continuing to show growth, Further, the reinsurance prices are yet to be hiked even as the negotiations are going on, which the impact might in case of price hike would be seen in due course.