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Life Insurance Monthly Performance Tracker - Oct 22

Life Insurance Monthly Performance Tracker - September 2022

General insurance has significant channel-specific product dependency, perhaps more than life insurance.

Private life insurers reported 8.9%/17.6% YoY growth in individual/total APE in Aug’22. Growth in individual/total APE in FY23-TD remains strong at 25.3/31% YoY.

Gross domestic premium income (GDPI) growth has been robust in FY23TD on the back of strong growth in motor GDPI and continued momentum in health GDPI (group as well as retail).

We believe that growth during the month was largely led by regular premium products such as protection, non-par savings and ULIPs. HDFCLIFE has fared well during the year, despite the growth rate being slower than private peers as the company has managed to grow steadily over the pre-pandemic levels. IPRU's growth has been strong this year, but remains below the pre-pandemic levels. IPRU seems to have slowed down in their push for group term business this month after previously registering strong...

We believe that some companies, such as HDFCLIFE and MAXF have become more cautious in their underwriting and hence reported a slower than private players growth, while SBILIFE and IPRU continue their strong momentum as seen in Q1FY22. We believe ULIPs continue to be in flavor and would be the larger driver of premium collection along with non-par guaranteed products. For IPRU, the growth during the month was led by the group term business and ULIPs, and the overall mix would be margin...

Overall NBP (new business premium) grew by 4.0% YoY for the industry to Rs. 300bn led by a strong growth of 33.9% yoy for private players to Rs. 82.1bn. Private players market share for Q1FY22 is now 33% and LIC at 67% vs 26% and 74% last year. IPRU's NBP grew by 2.2x in June-22 to Rs. 12.6bn, albeit on a lower base. The company registered a strong growth in both single premium and regular premium products. HDFCLIFE also registered a strong growth of 25.2% YoY, although the growth rate was lower than that of the private players for the month of June. The company's NBP was Rs. 16.9bn and it overtook SBILIFE as the largest private life insurer in terms of overall NBP. HDFCLIFE's NBP growth was largely driven by the group business, with single premium group products registering a 69.7% YoY growth. The company grew faster than the private peers during the quarter, driven by the group business. SBILIFE's NBP also grew at a healthy 17.6% YoY to Rs 17.7bn but the overall growth was slower than the private players' growth rate. The retail business contributed 53% to the overall NBP. Single premium products grew by 20.8% YoY while non-single premium (regular premium) products grew by 13.3% YoY....

Margins likely to remain steady, death claims to be monitored: Margin levels will be broadly steady at 24-26% (20-21% for SBILI) from FY21 levels as demand for low margin product like ULIP has not recovered completely, while push also is limited. We believe, continued preference of specific product in non-par & protection will keep margins steady. Second wave severity was high and hence we watch out for death claims, but should not breach provisions...

Margins likely to remain steady, death claims to be monitored: Margin levels will be broadly steady at 24-26% (20-21% for SBILI) from FY21 levels as demand for low margin product like ULIP has not recovered completely, while push also is limited. We believe, continued preference of specific product in non-par & protection will keep margins steady. Second wave severity was high and hence we watch out for death claims, but should not breach provisions...