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Private players’ Individual WRP grows ~3% YoY in Dec’20

LIC reports ~4% YoY growth, market share stands at 41% over FY21 YTD

* Individual weighted received premium (WRP) for private players grew 3% YoY in Dec’20 (v/s a 7.1% YoY decline in Nov’20), in line with the industry, which posted a growth of 3.4% YoY (v/s a 33% YoY dip of in Nov’20). The industry continues to display a positive trajectory after witnessing a decline due to COVID-19, led by a focus on Protection and Non-PAR segments. For FY21 YTD, Individual WRP for private players declined 5.8% YoY. The same for the industry dropped by 7.9% YoY.

* Among listed players, MAXF reported a strong growth (18% YoY), followed by SBILIFE/HDFCLIFE at 7%/4% YoY. On the other hand, IPRU continues to witness pressure and reported a 24% YoY decline.

* Mid-sized players reported strong growth, with Bajaj Allianz/Birla Sun Life/Tata AIA reporting a growth of 41%/20%/9% YoY, while Kotak Life reported a decrease of 13%.

* LIC reported a growth of 4.1% YoY (v/s a 54.3% YoY dip in Nov’20) in Individual WRP. During FY21 YTD, its Individual WRP declined 10.7% YoY

Individual WRP market share for private players expands to ~65% in Dec’20 (59% for FY21 YTD)

Individual WRP market share for private players expanded ~190bp MoM to ~65% in Dec’20, while LIC’s market share stood at 41% as on FY21 YTD. During FY21 YTD, SBILIFE (13.7%) remained the largest private insurer in terms of Individual WRP, followed by HDFCLIFE (9.6%) and IPRU (6.9%). On a un-weighted basis, SBILIFE was the largest private insurer with a market share of 7.6%, followed by HDFCLIFE (7.1%) and IPRU (4.1%).

Performance of key private players

The combined market share of listed players – SBILIFE, IPRU, HDFCLIFE, and MAXF – on an Individual WRP basis stood at 63.6% as of Dec’20 (v/s 62.9% in FY20). Among large private insurers, Tata AIA, Bajaj Allianz, and Birla Sun Life are getting firmly positioned in the fifth to seventh slot, based on Individual WRP. Among the key listed players on the basis of Individual WRP:

* HDFCLIFE reported a growth of 3.8% YoY (+8.3% YoY in FY21 YTD); total unweighted premium grew ~27% YoY (+11% YoY in FY21 YTD).

* SBILIFE reported a growth of 6.9% YoY (-9.7% YoY in FY21 YTD); total unweighted premium grew 12.1% YoY (+12.9% YoY in FY21 YTD).

* IPRU reported a decline of 23.9% YoY (-33.3% YoY in FY21 YTD); total unweighted premium grew 32% YoY (-3.3% YoY in FY21 YTD).

* MAXF reported a growth of 18.3% YoY (+10.7% YoY in FY21 YTD); total unweighted premium grew 21% YoY (+14.9% YoY in FY21 YTD).

Growth in the Protection business moderates

After reporting robust growth in the Protection business over 1HFY21, the pace of growth has moderated over the past few months. However, the trend still remains healthy. For private insurers, while Individual un-weighted non-single premium grew 2.2% YoY in Dec’20, Individual sum assured declined 14.3% YoY. Even for total un-weighted single premium, growth in sum assured at 36.8% YoY was lower than the 46.1% YoY growth in premium. For the industry as a whole, sum assured grew -11.1%/45.3% YoY in Dec’20 v/s a growth of 2.1%/50% in total un-weighted Individual non-single premium/single premium. LIC too reported similar trends. Even the ratio of Individual non-single sum assured to Individual non-single premium has declined over the past few months, indicating moderation in Protection growth.

Among listed players

* HDFCLIFE reported a 24% decline in sum assured as against a 2% growth in total un-weighted Individual non-single premium.

* IPRU reported a 26% decrease in sum assured, in line with the 26% dip in total un-weighted Individual non-single premium.

* SBILIFE reported a 15% decline in sum assured v/s 6% growth of in total unweighted Individual non-single premium.

* MAXF reported 1% growth in sum assured as compared to 18% growth in total un-weighted Individual non-single premium.

Operating metrics to stay resilient even as premium growth remains tepid

We expect premium growth to normalize from 4QFY21, while a low base of Mar’20 (due to the COVID-19 lockdown) would provide a likely boost. We expect HDFCLIFE to witness a gradual recovery in new business premium (NBP) and APE growth of 14% in FY21E. The same for SBILIFE is estimated at 5% YoY. On the other hand, IPRU would continue to reflect tepid trends and is likely to report an APE decline of ~13% for FY21E.

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