Published on 13/10/2018 11:45:40 AM | Source: Motilal Oswal Securities Ltd

India Life Insurance : Private players` WRP growth steady at ~17% YoY in Sep-18 - Motilal Oswal

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Private players’ WRP growth steady at ~17% YoY in Sep-18

Private players’ new business WRP growth remained steady at 16.8% YoY in Sep-18 (v/s +15.4% YoY in Aug-18), even as industry growth slowed down to 5.3% (+13.3% YoY in Aug18). Among private players, growth was led by robust trends for Tata AIA, Birla Sunlife and Max Life. WRP growth for HDFC Life and SBI Life stood at the highest level in at least past four months at ~22% YoY and ~17% YoY, respectively. On the other hand, LIC reported a decline of 6.6% YoY in its new business WRP, adversely affected by a 40% YoY decline in group WRP. LIC’s market share, thus, shrank 823bp MoM to 43.4%. YTD growth for industry now stands at 7% YoY, led by growth of ~13% for private players and 1% for LIC. We estimate private players to report WRP growth of 16% in FY19, which implies growth of 18% for the residual months. Private players’ market share, thus, will likely improve to 53.7% (51% in FY18).


Private players’ market share improves to 56.6% (51.3% in FY19YTD)

Private players’ share in total WRP increased to 56.6% in Sep-18 (+823bp MoM), led by strong momentum in WRP growth. Private players’ market share on an individual WRP basis stood at 59.7% (+200bp MoM). Among private players, HDFC Life and Max Life gained maximum market share in the individual WRP segment in Sep-18, though SBI Life (13.2% market share) remains the largest insurer based on individual WRP premiums.


Top five private players now account for ~66% of total private industry

The market share of top-five private players – SBI Life, ICICI Prudential Life, HDFC Life, Max Life and Kotak Life – stands stable at ~66%. However, a few other players like Tata AIA and more recently Birla SunLife have been showing healthy traction and are only slightly behind Bajaj Allianz Life – the sixth largest insurer. Among key listed players, on a WRP basis…

*  HDFCLIFE reported 22% YoY growth (20% during FY19YTD) – largely in line with our estimate.

*  SBILIFE reported 17% YoY growth (+10% in FY19YTD) – significantly below its historical run-rate.

*  IPRU reported flattish growth (-7% in FY19YTD) – significantly below our estimate.

*  Max Life reported 30% YoY growth (+25% in FY19YTD).


Mutual fund AUM declines 12.5% MoM to INR22t

Mutual fund AUM declined 12.5% MoM to INR22t, led by ~35% MoM decline in money market schemes (approx. INR2.9t) and ~11%/7%/6%/4.5% decline in gold ETF/equity/balanced fund/ELSS. 


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