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Insurance tracker July’21 – Private players gaining market share

The insurance industry witnessed muted growth in Jul’21, despite a lower base of last year, due to a slowdown in group insurance. Retail NBP for the industry witnessed ~1% yoy growth, while total NBP recorded an ~11% yoy decline. Retail APE for the industry grew ~15% yoy, while total APE grew ~5% yoy due to a surge in demand for singlepremium policies (mainly ULIPs).

Interestingly, most insurance players witnessed a surge in policy prices, except for LIC, which was the main contributor to growth. Policy sales declined, except for SBI and LIC. HDFCL remained at an advantage as it has been avoiding group protection where the trend was sluggish in Jul’21.

* On the basis of total APE, the share of private players increased to ~59% in Jul’21 from ~53% last month. Similarly, the share of retail APE rose to ~63% from ~61% last month, while the share of group APE grew to ~44% from ~37% last month.

* For private players, the trends in retail policy sales were better than group sales trends in Jul’21. Retail APE for private players grew ~31% yoy vs. ~16% growth in Jun’21. Group APE grew 3% yoy vs. ~1.26x growth in Jun’21.

* HDFCL: HDFCL reported ~16% yoy growth in APE in Jul’21 to Rs6.8bn. Retail APE increased to Rs6.9bn with 18% yoy growth as the company avoided group policies. NBP at Rs20.5bn grew ~4% yoy, mainly supported by a ~14% yoy surge in retail sales. Group NBP declined ~5% yoy. Policy sales fell ~4% yoy; however, the retail ticket size on the APE basis was ~26% higher yoy in Jul’21 as HDFCL saw significant price hikes in H2FY21.

* IPRU: IPRU reported 29% yoy growth in APE to Rs5.7bn in Jul’21 on a low base of last year. NBP at Rs11.5bn grew 36% yoy, supported by 43% yoy growth in group NBP. Policy sales fell ~3% yoy, while the retail APE ticket size grew ~28% yoy, similar to HDFCL.

* MAXL: MAXL reported APE growth of ~15% yoy to Rs4bn. Retail APE grew ~16% yoy to Rs3.9bn. NBP grew ~22% yoy to Rs5.7bn. Policy sales declined ~13% yoy, while the retail APE ticket size increased ~33% yoy.

* SBIL: SBIL reported a ~6% yoy decline in NBP to Rs18bn, mainly attributed to group NBP (down 59% yoy). Retail NBP registered ~51% yoy growth to Rs14bn. APE grew ~36% yoy to Rs11.7bn. Policy sales rose ~23% yoy, while the retail APE ticket size grew ~25% yoy. SBIL recorded the highest policy sales among private players with a market share gain.

* LIC: LIC reported a weak set of numbers with a ~14% yoy decline in APE. Retail APE fell ~4% yoy to Rs24.9bn. NBP dropped ~21% yoy to Rs120bn. Policy sales grew ~22% yoy, while the retail APE ticket size declined ~19% yoy

We expect the trend to improve further from Aug’21 amid the gradual easing of lockdowns in major cities and the advantage of a low base effect of last year.

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