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Private players’ APE growth at 30% in Q1FY22

Total and individual private life insurers’ APE grew 30/26% YoY in Q1FY22 led by Bajaj Allianz, HDFC Life, Max Life, IPRU Life, and SBI Life. Tata AIA’s total APE was up 5.4% YoY while LIC witnessed a decline of 28.5% in Q1FY22. BALIC / IPRU Life / SBI Life / Max Life have been the leaders in individual APE with FY22-TD APE growth of 49% / 44% / 32.5% / 33.8% respectively. While there was a low base effect due to Covid 1.0 in Q1FY21, Q1FY22 too witnessed less than fully normal operations due to the second wave.

In the short term, the increase in mortality and morbidity rates induced by the pandemic is an area of concern (189k reported covid deaths till date in FY22 vs 162k in FY21). However, we are past the peak of second wave and the companies have made extra covid-related provisions. Any additional provisions should be deemed one-offs. Overall demand remains strong and should be further aided by better medical testing.

* Base effect and maturity of new distribution tie-ups is leading to variations in APE growth across insurers. This is illustrated in Q1FY22 YoY individual APE growth rates of 44%/49.3% for IPRU/BALIC followed by Max/HDFC Life at 34%/22%. SBI Life has remained steady with a healthy 32.5% individual APE growth in Q1FY22.

* Sum assured trends: Individual sum assured market share gains have been witnessed for HDFC Life / IPRU Life / Max Life in Q1FY22 by 270 / 230 / 153bps vs FY21. SBI Life and Kotak Life lost individual sum assured market share by 36bps and 70bps respectively in Q1FY22 compared to FY21.

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