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Not a bad start to the year

Private life insurance companies reported 23% APE growth in April 2024 on a low base, translating to 11% on 2-year CAGR basis. This is an ‘okay-ish’ start considering sluggish activity at the beginning of the year and moderate growth outlook by all listed players. Among listed players, HDFC Life and Max Life fared better than peers, reporting 14% 2-year APE CAGR. ICICI Prudential Life and SBI Life reported muted 7-9% growth in APE (2-year CAGR) and 1-3% decline in NoP. Aditya Birla SL and Tata AIA reported strong 22-25% 2-year APE growth, Bajaj Allianz was slower at 15%.

April 2024 growth was strong on a low base

The life industry reported 33% yoy APE growth in April 2024 on a low base. April 2023 was a weak month for most life insurers due to front-ending of demand in March 2023. 2-year CAGR was muted at 8% for the industry. While top-4 players reported 10% growth (2-year CAGR), tier-II players such as Aditya Birla Sun Life and Tata AIA reported 22-25% growth.

Player-wise comments

4 HDFC Life reported 23% yoy APE growth and 14% on 2-year CAGR basis in April 2024. HDFC Life fared better than most private players (up 11% on 2-year CAGR) as its base did not weaken in April last year. Yoy growth in April 2023 was 6%. NoP growth remains strong at 40% yoy, 27% on 2-year CAGR basis and ticket size is down 7% (up 7-21% for peers), likely driven by penetration into lower tier cities.

4 While ICICI Prudential Life’s APE shot up 63% yoy in April 2024, 2-year APE CAGR was moderate at 9%; this reflects weak momentum in April 2023, which picked up toward the end of the year. As such, 2-year CAGR may not be accurate representation. Ticket size growth was strong at 61% yoy likely due to sustained growth in ULIPs. NoP declined 3% on 2-year CAGR basis for ICICI Prudential Life.

4 Max Life reported 34% yoy APE growth and 14% on 2-year CAGR basis in April 2024. While we expect Max Life to report higher growth than peers, April 2024 trends are in line with peers. April tends to be a weak month for insurance and growth should pick up in the subsequent months. NoP growth was lower than HDFC Life at 9% on 2-year CAGR (up 7% for private players).

SBI Life reported 22% yoy APE growth and 7% on 2-year CAGR basis in April 2024. APE growth tapered down to 15% yoy in 2HFY24 from 18% in 1HFY24. Concerns of mis-selling of insurance at public sector banks may have had an impact and the weakness continues in April 2024. NoP was flat on both yoy and 2-year CAGR basis.

4 Bajaj Allianz Life reported 23% yoy APE growth and 15% on 2-year CAGR basis. The differential in growth rate between Baja Allianz and top-4 players has narrowed likely due to weaker volumes at Axis Bank channel.

4 LIC reported 45% yoy APE growth, higher than private players (23%), leading to pick-up in market share to 35% from 27-33% in the previous eight months. This is likely a temporary reversion, we expect LIC to lag private peers and report muted 6% APE growth.

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