Pvt life insurance companies register 13% growth in APE in July

According to a report by Kotak Institutional Equities, Bajaj Life Insurance, ICICI Prudential Life and SBI Life have delivered more than 10% growth

Private life insurance companies delivered 13% year-on-year growth in individual annual premium equivalent (APE) during July 2016, lower than 24-27% over the previous two months, according to a report.

According to a report by Kotak Institutional Equities, life insurance companies in the private sector delivered 13% growth in individual APE during last month, leading to 18% growth year to date(YTD) over the past four months.

The report said Bajaj Life Insurance, ICICI Prudential Life and SBI Life have delivered more than 10% growth among large players while HDFC Life, Reliance Life and Met Life reported a decline.

Bajaj Allianz Life delivered 44% growth in individual APE as compared to 72% in June 2016. During June quarter of this fiscal, share of individual unit linked (UL) policies increased to 58% from 40% year-on-year.

Birla SL, on a low base, reported 10% APE growth as compared to 7% in June 2016. This was largely led by increase in ticket size, the report said, adding that HDFC Life reported 17% decline in individual APE.

ICICI Prudential Life reported 15% individual APE growth whereas ticket size in individual non-single business was flat year-on-year, up 7% on quarterly basis, it said, adding that SBI Life remains strong at 50% individual APE growth.

LIC reported 16% growth in individual APE on the back of 40% growth in individual non-single ticket size, likely due to its focus on ULIPs.

The report goes on that LIC continues to have high share of single premium at 82%. Private players have generally been selective in this segment.

The share of single premium declined 33-36% in June-July 2016 from 50% in previous months. HDFC Life, Bajaj Life, SBI Life and Max Life have a higher share of single premium in their overall business.

In the group business, the share of private players declined to 12%. APE growth for private players in ULIPs will likely remain strong, it said.

The report says that inflows to equity mutual funds remain strong at about Rs 25 billion last month, up from Rs 3 billion in June and Rs 44-47 billion in April and May 2016.

The momentum has slowed down over the past few months but remains in the positive. This may imply that APE growth for private players in ULIPs will likely remain strong, it said.