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Private life insurance companies reported muted 2% APE growth in February 2025. Axis Max Life APE growth was moderate at 8.7%, and HDFC Life reported moderation in growth to 5.3% yoy. ICICI Prudential Life and SBI Life reported a 5-10% yoy decline. Aditya Birla Sun Life was an outlier, reporting 26% yoy growth, while Bajaj Allianz Life reported yoy flat numbers. LIC continued to report a decline, down 21% yoy.

Smaller players going strong; weak trends among large players

Private players reported muted 2.1% yoy APE growth in February 2025; the weakness was broad-based with top-4 players reporting yoy flat numbers. APE growth for Tier-II players was also muted at 4% yoy during the month. ICICI Prudential Life and SBI Life reported a 5-10% yoy decline, while HDFC Life and Axis Max Life reported 5-9% yoy APE growth. Aditya Birla Sun Life, Future Generali Life, Ageas Federal Life, India First and Shriram Life were outliers, reporting 23-115% yoy APE growth.

Private insurance companies reported 22% APE growth in 1HFY25, 13% in 3QFY25 and 16% in Jan 2025. Following a strong 1H (sunset period for older surrender value guidelines, higher IRRs) and likely moderating appetite for ULIPs, APE growth seems to have weakened. While players are now gearing up for the heavy month of March, the overall outlook remains a bit soft given the high base and fatigue setting in. Clarity on movement in equity and debt markets will be the key business driver.

Axis Max Life fares better than peers

* Axis Max Life reported moderate 8.7% APE growth during the month, driven largely by a rise in ticket sizes (up 20% yoy). The company reported sharp 400 bps yoy margin compression in 3QFY25. A sharp rise in ticket sizes in the first two months of the quarter (18-20%) suggests a sustained high share of ULIP in the product mix, which doesn’t bode well for margins. YTD growth is holding on at 21% against management guidance of 20%+.

* HDFC Life reported muted APE growth of 5.3% yoy in February 2025, down from 25% in January 2025. YTD growth remains strong at 19% yoy compared to 12% in 3QFY25 and 20% in 9MFY25. Growth was volatile over the past four months, ranging 5-25% yoy. March remains a heavy and the most important month.

* ICICI Prudential Life reported a sharp 9.8% yoy decline in APE on a high base (APE up 35% yoy in February 2024). While ticket sizes were up 6.4% yoy, a sharp 19% decline in the number of policies (NoP) led to a drag in premiums. The moderation in growth may be offset by better margins, a result of the shift in product mix. 4Q has a high base, and we expect flat growth for the company.

* SBI Life reported a 4.5% yoy decline in APE following muted single-digit growth reported in the past seven months. YTD growth was muted at 9.5% yoy. Weakness in the parent bank is likely weighing down on overall growth for SBI Life.

* Bajaj Allianz Life reported yoy flat APE trends, likely driven by reorientation of product design and strategy undertaken by the company. Management guidance on growth, anyway, remains soft.

* Aditya Birla SL continued to report strong 26% APE growth, translating to 32% YTD growth. Increases in partnerships and footprints are key drivers. The ticket size growth is moderate at 13% yoy. SA growth was at 105% in Jan 2025, reflecting higher protection growth.

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