India’s life insurance sector reported a strong 14% year-on-year growth in premium collections from new policy sales last month, with private sector insurers outpacing the state-run Life Insurance Corporation (LIC).
Private life insurers together posted a 16% on-year jump in new policy premium collections in September while LIC reported a 12% increase, data from Life Insurance Council showed.
Among listed private insurers, ICICI Prudential Life and Max Life led the pack with 34% and 37% ingrowth, respectively, in annualised premium equivalent (APE). HDFC Life reported a 22% rise while SBI Life‘s performance remained flat in September.
This growth has come at a time when life insurers are facing pressure from regulatory changes in surrender charges from October 1.
As per the new norms, the surrender value – or the amount insurers pay to policyholders upon terminating the policy before maturity – has increased.
x`
In view of this, insurers have brought in changes in product, like increasing premiums, and commission constructs for agents from this month.
The industry is expected to have posted a 15% overall APE growth for the quarter, aided by a surge in the sale of unit-linked insurance plans (ULIPs).
As insurance companies shift away from traditional savings products, the buoyant equity markets have spurred interest in ULIPs as policyholders seek higher returns amid a strong stock market rally.
“While the share of ULIPs has been increasing, the demand for annuity, non-par (QoQ), and protection remains strong, especially with the launch of a range of new products,” Motilal Oswal said in a report. “This can increase the share of non-par products in the mix, offsetting the ULIP share and leading to the expansion of VNB (value of new business) margins.”
For the first half, life insurers reported 19.47% growth in total new premium income. In this period, LIC reported 24.73% growth while the private sector posted 12% growth.
General insurers, meanwhile, saw a decline of 6.53% in gross written premium in September with major players showing a moderate growth.
Listed players like ICICI Lombard reported a modest growth of 3.6% in September and 15.52% for the quarter. Similarly, New India Assurance saw 8.86% growth in September and 3% during the quarter. GO Digit recorded 5.46% growth in September and 11.52% during the first half.
Star Health Insurance saw strong growth in September of 18.41% while for the quarter it reported 17% growth.
Content Source: economictimes.indiatimes.com