The brokerage believes the life insurance industry is geared to register robust growth over the long term in light of the under-penetration of life insurance in India as well as due to the higher protection gap.
Life Insurance Data: The major private life insurance companies have lost the market share to Life Insurance Corporation of India (LIC) in the financial year 2022-23 so far, as per the September life insurance data released by the Insurance Regulatory and Development Authority of India (IRDAI) on Tuesday.
The state-owned life insurer’s market share has jumped by 5 per cent, which is a combined fall by most of the major private insurers’ share in FY23 so far. HDFC Life Insurance saw the biggest loss of market share in the current fiscal so far, down 1.75 per cent, while it showed no change month-on-month.
Other major private sector life insurance companies – ICICI Prudential Life Insurance and SBI Life Insurance — saw market share eroding marginally M-o-M, down 0.5 and 0.1 per cent, respectively. While the former lost 0.74 per cent and the latter is down by 0.91 per cent of market share in FY23 so far.
While the life insurance industry regained growth traction post-entering FY23, growth still appears optically higher for H1FY23, given the lower base in April-May 2021, which was impacted by the second wave of COVID-induced lockdowns, Axis Securities said in its commentary on the life insurance sector.
It said, “LIC reported healthy growth in NBP (New Business Premium) by 34.9 per cent YoY (year-on-year) and by 14.2 per cent MoM in Sept’22. This healthy growth was aided by growth in the group single premium and group non-single premium segments.”
While APE (Annualized Premium Equivalent) stood at Rs 5,246 crore in September 2022, registering a growth of 22.5/8.8 per cent YoY/MoM, respectively, Axis Securities said. “Owing to overall strong performance in growth momentum, LIC gained market share in YoY/H1FY23 terms of NBP/APE.”
Given the expected strong demand for protection, annuity, and non-PAR (non-participating) products, Axis Securities expect the growth momentum to continue going forward.
The domestic brokerage believes the life insurance industry is geared to register robust growth over the long term in light of the under-penetration of life insurance in India as well as due to the higher protection gap.
Shares of LIC ended lower by around 0.7 per cent to Rs 615.4 per share on the BSE. While HDFC Life, SBI Life and ICICI Pru Life each gained marginally by around 0.6-0.7 per cent to Rs 526.15, Rs 1213.15 and Rs 512.45 per share, respectively on the BSE.
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