Private players’ individual WRP declines ~6% YoY for Aug’20
LIC reports growth of ~2% YoY; market share increases 242bp over FY21YTD
* Private players’ individual weighted received premium (WRP) declined 5.8% in Aug’20 (v/s -7.1% YoY in Jul’20). The industry also posted decline of 2.3% YoY (v/s -0.3% YoY in Jul’20). Overall decline has moderated from levels seen over Mar–May’20, but was higher than Jul’20 levels, largely attributed to slower growth in LIC. FY21YTD, private players’ individual WRP has declined 15.2% YoY; for the industry, it has dropped 10.1% YoY.
* Among the listed players, HDFC Life and Max Life reported positive trends with growth of 14% YoY and 11% YoY, respectively. On the other hand, SBI Life posted decline of 14% YoY. IPRU Life also continues to witness pressure and reported decline of 29% YoY.
* Mid-sized players reported mixed trends. Tata AIA / Bajaj Allianz reported growth of 34%/13% YoY, while Birla Sun Life reported decline of 6% YoY. Kotak Life reported a flattish trend.
* LIC continued to report a positive trend, albeit at a slower pace, led by 2.1% YoY growth in individual WRP (v/s 9.6% YoY in Jul’20). FY21YTD, LIC’s individual WRP has declined 3.1% YoY.
Private players’ individual WRP market share contracts to ~54% for Aug’20 (55% FY21YTD)
Private players’ individual WRP market share contracted ~83bp to ~54% in Aug’20 v/s 55% in Jul’20. This was attributable to private players reporting decline of ~6% v/s LIC’s reported growth of ~2%. FY21YTD, SBI Life (11.1%) remained the largest private insurer in terms of individual WRP, followed by HDFC Life (9.8%) and IPRU Life (6.5%). On an unweighted basis, SBI Life was the largest private insurer with market share of 6.8%, followed by HDFC Life (6.6%) and IPRU Life (3.3%).
Performances of key private players
The combined market share of listed players – SBI Life, ICICI Prudential Life, HDFC Life, and Max Life – on an individual WRP basis stood at ~63.2% as of Aug’20 (v/s 62.9% in FY20). Tata AIA, Bajaj Allianz, and Birla Sun Life are getting firmly positioned among the 5th–7th largest private insurers on individual WRP. Among the key listed players, on the basis of individual WRP:
* HDFC Life reported growth of 13.9% YoY (-5.2% YoY FY21YTD); total unweighted premium rose ~45% YoY (-2.5% YoY FY21YTD).
* SBI Life reported decline of 14.1% YoY (-24.7% YoY FY21YTD); total unweighted premium grew 26% YoY (+14.2% YoY FY21YTD).
* IPRU Life reported decline of 29.2% YoY (-41.6% YoY FY21YTD); total unweighted premium fell 14.5% YoY (-23.1% YoY FY21YTD).
* Max Life reported growth of 11.2% YoY (+0.6% YoY FY21YTD); total unweighted premium grew 19.3% YoY (+5.6% YoY FY21YTD).
Divergent trends in sum assured – reflect improving business mix
According to our observation, while premium growth continues to decline / remains modest for most insurers, growth in sum assured is witnessing divergent trends. For private insurers, while total unweighted non-single premium declined 7.1% YoY in Aug’20, the individual sum assured grew 11.4% YoY. Even for total unweighted single premium, growth in sum assured at 96.4% YoY was much higher than 59.5% YoY growth in premium. For the total industry, sum assured rose 45.8%/6.1% YoY in Aug’20 v/s 9.7%/1.3% decline in total unweighted individual single/non-single premium. LIC, on the other hand, reported decline of 7.7% YoY in sum assured v/s growth of 8.4% YoY in total unweighted non-single premium. This reiterates that private insurers have been focusing on the Protection business, which has a higher sum assured in proportion to premium. Conversely, ULIPs have been facing pressure due to volatile capital markets, with a generally higher average ticket size.
Among the listed players…
* HDFC Life reported growth of 0.4% in sum assured v/s growth of 11.7% in total unweighted individual non-single premium.
* IPRU Life reported growth of 14.3% in sum assured v/s decline of 31.0% in total unweighted individual non-single premium.
* SBI Life reported growth of 3.7% in sum assured v/s decline of 15.1% in total unweighted individual non-single premium.
* Max Life reported much higher growth of 42.9% in sum assured v/s growth of 10.4% in total unweighted individual non-single premium.
* Mid-sized players such as Bajaj Allianz and Kotak Life reported much higher growth in sum assured v/s total unweighted individual non-single premium.
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