Published on 27/06/2020 1:33:52 PM | Source: Motilal Oswal Financial Services Ltd

Insurance Sector Update By Motilal Oswal

Posted in Broking Firm Views - Sector Report| #Insurance Sector #Sector Report #Motilal Oswal Financial Services Ltd

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COVID-19 weighs on performance – Pvt. players’ individual WRP down ~32% YoY for May’20 (-36% for FY21YTD)

LIC’s individual WRP dips ~3% YoY (-23% for FY21YTD), resulting in 20% YoY drop (-30% for FY21YTD) in overall industry

* Private players’ individual weighted received premium (WRP) declined 32.1% in May’20 (v/s -40.3% YoY in Apr’20) while industry posted decline of 19.8% YoY (v/s - 43.7% YoY in Apr’20). The decline was mainly due to the COVID-19 outbreak, which continues to weigh down business performance. For FY21YTD, private players’ individual WRP plunged 35.5% YoY; for the industry, it dropped 30% YoY.

* Amongst the listed players, Max Life witnessed the lowest decline of 20% YoY while HDCF Life saw a decline of 33% YoY. SBI Life/IPRU Life reported decline of 46%/52% YoY.

* Amongst mid-sized players, Bajaj Allianz witnessed decline of 18% YoY while Birla Sun Life/Tata AIA saw growth of 10%/3% YoY.

* LIC reported much lower decline of 3.1% YoY (v/s -47.9% YoY in Apr’20) in individual WRP. During FY21YTD, LIC’s individual WRP declined 23.0% YoY.


Private players’ individual WRP market share contracts to ~49% for May’20 (52% as on FY21YTD)

Private players’ individual WRP market share contracted ~910bp to ~49% in May’20 vs 58% in Apr’20 as LIC posted much lesser decline of 3.1% YoY as against 19.8% YoY decline by the industry whereas private players reported higher decline of 32.1%. During FY21YTD, HDFC Life (9.5%) remained the largest private insurer in terms of individual WRP, followed by SBI Life (7.7%) and IPRU life (6.5%). On an un-weighted basis, SBI Life was the largest private insurer with market share of 7.6%, followed by HDFC Life (6.4%) and IPRU Life (4.6%).


Performance 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 ~56.8% as at May’20 (v/s 62.9% in FY20). Tata AIA, Bajaj Allianz and Birla Sun Life are getting firmly positioned amongst the 5-7th largest private insurers on individual WRP. Amongst the key listed players, on the basis of individual WRP –

* HDFC Life reported 33% YoY decline (-32% YoY in FY21YTD); total un-weighted premium declined ~47% YoY (-50.2% YoY in FY21YTD).

* SBI Life reported decline of 46% YoY (-57% YoY in FY21YTD); total un-weighted premiums declined 31.3% YoY (-15.5% YoY in FY21YTD).

* IPRU Life reported decline of 52% YoY (-54% YoY in FY21YTD); total un-weighted premium declined 2.3% YoY (-29.6% YoY in FY21YTD).

* Max Life reported 20% YoY decline (-20% YoY in FY21YTD); total un-weighted premium declined 18.3% YoY (-16.8% YoY in FY21YTD).


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