Insurance Monthly - July 2010

The Indian Life Insurance industry reported a healthy ~20% growth in Annual Premium Equivalent (APE) in July 2010. Growth was uniform across private players and LIC. Amongst the private players, ICICI Prudential grew the highest by 50.7% yoy.

The Direct Tax Code contained a couple of proposals that could affect insurance industry’s prospects negatively - Dividend distribution tax of 5% on ULIPs and Income tax exemption for investment in approved funds up to Rs100,000 with no specific mention of life insurance products. 

• Indian Life Insurance industry grew by 19.3% yoy in July‘10. The growth was driven by both LIC (19% yoy) and private players (19.6% yoy). However, on mom basis, the industry de-grew by 57.7% with LIC’s witnessing a significant decline of 72.7% and private players declined by 12.4%.
  
  
• Most of the large private players registered a decline in APE on mom basis. The companies which witnessed growth were Tata AIG (6%) and Canara HSBC OBC Life (10.8%).
  
  
• In July’10, LIC mobilized premium of Rs56.9bn vis-à-vis Rs75.4bn in July’09, down by 24.5%. Out of this, individual non-single premium saw a decline of 11.1% as against last year. On the other hand, Group non-single premium witnessed an increase of 89.1% and individual single and group single premium witnessed a growth of 2.9% and 9.7% respectively.
  
  
• On YTD basis, LIC’s APE market share declined from 58.9% to 56.2% whereas that of private players increased from 41.1% to 43.9%. Amongst the private players, ICICI Prudential had a market share of 23.2% followed by HDFC Standard with 11.9% and next in line was SBI with 10.1%.