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Insurance tracker May’21 – Weak performance across companies

The insurance industry reported weak yoy growth in May’21 even on a low base from last year as the second wave of Covid-19 and consequent lockdowns impacted sales of insurance companies across the country.

Retail NBP for the industry witnessed a decline of ~9% yoy, while total NBP recorded a decline of ~6% yoy. Retail APE for the industry declined ~9% yoy, while total APE declined ~29% yoy.

* For private players, the trend in retail sales remained better compared with group policy sales as Retail APE for private players grew ~5% yoy vs. ~90% growth in Apr’21. Group APE declined ~33% yoy vs. ~47% growth in Apr’21.

* On the basis of total APE, the share of private players decreased to ~50% from ~60% in Apr’21. The share of retail APE stood at ~56% vs. ~60% in Apr’21, while the share of group APE stood at ~32% vs. ~59% in Apr’21.

* HDFCL: HDFCL reported ~26.7% yoy growth in APE in May’21 to Rs4.2bn with retail APE reporting a rise of ~17% yoy to Rs3.6bn. NBP at Rs9.3bn grew ~47% yoy, mainly supported by a surge in group sales by ~118.7% yoy, while retail NBP grew ~18% yoy. Interestingly, the retail ticket size on APE basis was ~54% higher yoy during May’21 as the company has witnessed significant price hikes in H2FY21.

* IPRU: IPRU reported a decline of ~38% yoy in APE to Rs3.7bn in May’21 even on a low base from last year. Retail APE grew ~28% yoy to Rs2.4bn; however, group APE declined ~69% yoy to Rs1.3bn. NBP at Rs6.5bn declined ~4% yoy, dragged down by ~43% yoy decline in group NBP. Policy sales declined ~14% yoy, while the retail APE ticket size grew ~47% yoy which was similar to HDFCL.

* MAXL: MAXL reported APE growth of ~11% yoy to Rs1.9bn. Retail APE grew ~12% yoy to Rs1.8bn. NBP grew ~25% yoy to Rs2.9bn. Policy sales declined ~28% yoy, while the retail APE ticket size increased ~57% yoy.

* SBIL: SBIL reported ~2% yoy growth in NBP to Rs6.5bn, mainly backed by group NBP, which grew ~3% yoy to Rs2.6bn. APE declined ~8% yoy to Rs3.2bn. Policy sales rose ~10% yoy, while the retail APE ticket size declined ~4% yoy.

* LIC: LIC has reported ~43% yoy decline in APE. Retail APE declined ~22% yoy to Rs13.9bn. NBP declined ~12% yoy to Rs89.5bn. Policy sales declined ~12% yoy, while the retail APE ticket size declined 11% yoy.

We expect the trend to witness an improvement from Jun’21 due to gradual reopening of major cities across states with the base-effect advantage of last year remaining intact.

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