In August ‘09, the Indian Life Insurance industry sustained its growth momentum for the second consecutive month. Its total Annual Premium Equivalent (APE)# witnessed higher growth, at 10% yoy vis-à-vis 6.1 yoy in July `09. LIC continues to lead the industry growth reporting a strong growth of 35.2%yoy in August ’09. However, private players continue to be in negative zone, reporting a decline of 5.2%yoy. The decline was relatively less steeper compared to the month of July’09 (down by 9% yoy). On a mom basis, the private players collectively outperformed LIC and the insurance industry posting a growth of 10.1%, whereas APE for LIC remained flat with a meager rise of 0.5%.
Key observations
Indian Life insurance industry continued to be on a recovery track reporting strong 10%yoy growth. LIC witnessed a whopping growth of 35.2% yoy. However, private players continue to exhibit a downward trend, registering a decline of 5.2% yoy in August ’09. On a mom basis, a significant improvement was witnessed by private players with total APE growing by 10.1% vis-à-vis industry growth of 5.4%.
ICICI Prudential Life, after getting displaced from the top, among the private players, in April `09, regained its top position in August `09 replacing SBI Life (based on YTD market share). This was mainly on the account of strong inflows in the month of August. ICICI Prudential Life mopped up Rs5.2bn in its first year premium vis-à-vis Rs3.9bn in the previous month, up by 33.4%mom. SBI Life managed to mobilize Rs3.1bn vis-à-vis Rs3.3bn down by 5.9%mom.
Among the top ten private players, only four players reported yoy APE growth in August ’09, namely SBI Life (up by 9% yoy), Birla Sunlife (up by 21.3% yoy), HDFC Standard (up by 10.4% yoy) and Tata AIG (up by 20.7% yoy). Kotak Mahindra lost the most among the Top 10 private players witnessing a decline of 44.6% on a yoy basis.
On YTD basis, LIC (21.5% yoy) and SBI (5.1%yoy) were the only insurance firms who witnessed growth in APE. Kotak Mahindra Old Mutual witnessed the steepest decline among the Top 10, down by 39.8% yoy. It was closely followed by ICICI Prudential Life, which witnessed a decline of 38.1% yoy while Bajaj Allianz was down by 30.2% yoy.
In August ’09, ICICI Prudential Life regained its top position among the private players but continued to lose its APE market share. It lost by 694bps, highest among the top ten private players on a YTD basis. Other market share losers were Bajaj Allianz and Kotak Mahindra OM, who lost 265bps and 126bps respectively on a YTD basis. SBI Life continued to gain market share, up by 285bps compared to same period last year.