Insurance Monthly Update – October 2009

In October ‘09, Indian Life Insurance Industry clocked a double digit growth (first time in last twelve months) of 35.7% yoy in the total Annual Premium Equivalent (APE)^#. The growth was largely contributed by the strong inflows in the first year premium. Private players, for the first time in last six months, witnessed a strong growth of 29.6% yoy due to heavy inflows in the group premium category (up by 199% yoy). LIC continues to hold growth momentum as its APE grew 45% yoy. However, on YTD basis private players reported decline of 7.9%. Cumulatively all private players have mobilized Rs162bn in first year premium during 7M FY10 vis-à-vis Rs178bn during the same period in FY09.

• The insurance industry witnessed a strong growth in October ’09 with 35.7% yoy rise in APE. LIC and private players both contributed for the double digit growth, as their APE was up by 45% and 29.6% respectively. After a gap of six months, private players were in the positive zone. This was mainly on the account of strong inflows in the group premium category. Private players garner Rs6.5bn in October ’09 vis-à-vis Rs2.4bn last year under the said category.
• On a mom basis, industry registered a decent growth of 7% in October ’09. Private players merely contributed to the industry growth, as their APE was up by just 1%. However, LIC outperformed the private players and industry by posting APE growth of 16.7% on a mom basis. Other than LIC, ICICI Prudential Life, SBI Life and Max New York posted double digit growth on a mom basis, among the private players.
• SBI Life continues to hold the top position in October ’09. It gained the most among the private players with a growth of 129.8% on a yoy basis and 18.6% on a YTD basis. The growth was mainly on account of strong inflows in the group non-single premium category. Premium underwritten saw seven-fold jump in last one year. In October ’09, it collected Rs3bn vis-à-vis Rs0.4bn last year.
• Among the top-10 private players, only three players reported APE decline in October ’09. Kotak Mahindra OM Life lost the most with a decline of 32.8% on a yoy basis. Other two were Met Life (down by 8.9% yoy) and Bajaj Allianz (down by 11.3% yoy). Other than SBI Life, two small players saw a robust growth namely Tata AIG (APE was up by 74% yoy) and Max New York (APE was up by 58% yoy).
• On YTD basis, APE market share among the private players and LIC was at 56:44 vis-à-vis 63:37 in 7M FY09. APE market share of LIC has witnessed a significant rise of 700 bps on YTD basis. Among the private players, the biggest loser in APE market share on YTD basis was ICICI Prudential Life with 16.4% market share, saw a decline of 424bps compared to the last fiscal year. It was the worst hit as its first year premium declined by 33% in 7M FY10 vis-à-vis the corresponding period last year. It mopped up premium of Rs Rs2.5bn during 7M FY10 vis-à-vis Rs3.8bn last year.