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Private players’ Individual WRP grows ~7% YoY in Jan’21

LIC reports a decline of ~45% YoY, market share at 41% over FY21 YTD

* The Individual weighted received premium (WRP) for private players grew 7% YoY in Jan’21 (v/s 3% in Dec’20), while the industry posted a 21.8% decline (v/s a growth of 3.4% in Dec’20). The same was due to a strong base month (Jan’20) in which the industry posted a sharp growth of 45.8% YoY (led by LIC). Private players continue to maintain their positive trajectory, led by the focus on the Protection and Non-Par segments. For FY21 YTD, Individual WRP for private players declined 4.2% YoY. For the industry, it fell 10% YoY.

* Among listed players, HDFCLIFE/MAXF reported a strong growth of 24%/15% YoY, while SBILIFE reported muted growth (1%). IPRU continues to witness pressure and reported a decline of 7% YoY (much lower than earlier trends).

* Mid-sized players reported strong growth with Bajaj Allianz/Birla Sun Life/Tata AIA reporting a growth of 32%/12%/4% YoY, while Kotak Life grew 6% YoY.

* LIC reported a 45.4% YoY decline (v/s a growth of 4.1% YoY in Dec’20) in Individual WRP as the base month registered a strong growth of 98.5% YoY. During FY21 YTD, its Individual WRP declined 17.2% YoY.

Performance of key private players

The combined market share of listed players – SBILIFE, IPRU, HDFCLIFE, and MAXF – on an Individual WRP basis stood at 65.2% as of Jan’21 (v/s 62.9% in FY20). Tata AIA, Bajaj Allianz, and Birla Sun Life are firmly positioning themselves from rank five to seven of the largest private insurers on Individual WRP. Among the key listed players on the basis of Individual WRP –

* HDFCLIFE reported 24.4% YoY growth (+10.2% YoY in FY21 YTD); total unweighted premium grew ~17% YoY (+11.6% YoY in FY21 YTD).

* SBILIFE reported a growth of 0.8% YoY (-8.2% YoY in FY21 YTD); total unweighted premium increased 17.5% YoY (+13.4% YoY in FY21 YTD).

* IPRU saw a 7.3% YoY decline (-30.4% YoY in FY21 YTD); total unweighted premium rose 18% YoY (-0.9% YoY in FY21 YTD).

* MAXF posted a 14.7% YoY growth (+11.2% YoY in FY21 YTD); total unweighted premium grew 15% 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. The trend still remains healthy. For private insurers, while the Individual unweighted non-single premium grew 6.2% YoY in Jan’21, the Individual sum assured declined 11.9%. Even for total unweighted single premium, growth in sum assured at 15.6% YoY was lower than the 48.2% growth in premium. For the industry as a whole, sum assured grew -30.1%/2.7% YoY in Jan’21 v/s a growth of -22.6%/2.9% in total unweighted Individual non-single premium/single premium. LIC 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 15% decline in sum assured v/s 25% growth in total unweighted Individual non-single premium.

* IPRU reported a 27% dip in sum assured with a much lesser fall of 11% in total unweighted Individual non-single premium.

* SBILIFE reported a 6% decline in sum assured as against flattish growth in total unweighted Individual non-single premium.

* MAXF reported 7% growth in sum assured v/s 15% growth in total unweighted 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-led lockdown) will provide a likely boost. We expect HDFCLIFE to see a gradual recovery in new business premium (NBP) and APE growth of 14% YoY in FY21, while MAXF/SBILIFE will report a 10%/5% growth. IPRULIFE would continue to reflect tepid trends and is likely to report ~15% decline in its APE in FY21E.

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