HYDERABAD: Insurance sector premium saw robust growth in May, particularly for private sector players, though sustenance of high double-digit growth will be crucial, noted brokerage Kotak Institutional
Equities Research.
While state-run Life Insurance Corporation of India (LIC) regained market share in group business last month, private insurers’ also lost out in single premium business with their share reducing to 44 per cent from 55 per cent in April. In group business, private players stake reduced to 15 per cent in May from a mighty 48 per cent in the previous month. In both, insurers like ICICI, HDFC, Birla Sunlife and SBI Life were the most affected.
Overall industry growth stood at 13 per cent, while LIC saw a de-growth of three per cent over last year. However, private insurers saw a robust increase of 27 per cent growth in May led by low base effect, focus on ULIPs and moderate appetite for equity investments. Interestingly, mutual fund inflows to equities improved marginally, with inflows at Rs 2,700 crore in May, as compared with Rs 2,000 crore in April.
Meanwhile, among players, HDFC Life turned in better growth in individual premiums at 59 per cent after witnessing muted growth between November, 2018 and March, 2019. Average ticket size in individual non-single segment too shot up 56 per cent over last year. Similarly, SBI Life’s individual premium growth was strong at 37 per cent over last year despite a high base of 27 per cent in May, 2018. The company moderated it overall growth momentum during the first nine months of FY19 due to its focus on productivity and protection business, noted Kotak.
In contrast, ICICI Prudential Life reported flat growth at 1 per cent in individual premiums, just a shade above the previous month’s two per cent growth. In March, the business was much better at 14 per cent increase in premiums.
On the rise
Cumulatively, the total new premium collected by all insurance companies during the April-May period of this 2019-20 increased by 41.2 per cent year-on-year to D28,395.90 crore