First-year premiums collected by life insurance companies for April-November 2018 saw a tepid growth of 0.33 per cent over the same period last year, mainly because of Life Insurance Corporation's (LIC’s) dismal performance.
First-year premiums earned by life insurers amounted to Rs 1.23 trillion in April-November 2018 as against Rs 1.22 trillion in the same period in 2017.
While private life insurers reported 23.22 per cent rise in first-year premiums in April-November period, state owned LIC, saw its first-year premiums shrinking by 7.9 per cent in the first eight months of the fiscal year over the same period last year.
According to Insurance Regulatory and Development Authority of India (Irdai) data, LIC's first-year premium contracted by 7.93 per cent from Rs 903.14 billion for the period ended November 2017 to Rs 831.48 billion.
Total first-year premiums of private insurers for the period rose by 23.22 per cent to Rs 401.97 billion.
Moreover, LIC’s first-year premium in November declined by 22.9 per cent to Rs 95.11 billion from Rs 123.36 billion in November 2017. But the private insurers earned a total of Rs 53.46 billion in November from their first year premiums, up 14.78 per cent from Rs 46.58 billion in November 2017.
“The slowdown in retail investor appetite for capital market investments is reflecting in inflows to the sector. In November 2018, private sector individual Annualised Premium Equivalent (APE) was almost flat as compared to 17-19 per cent growth over the past three months,” a report on the insurance sector by Kotak Institutional equities said.
Inflows to equity mutual funds declined to Rs 86 billion, the lowest in recent months, largely holding on due to volumes in SIPs. “We expect near-term volumes to remain weak though higher growth in protection business makes topline growth less relevant,” the report added.
Top four private insurers, in terms of their market share in premiums collected, have registered positive growth. HDFC Life, Max Life, SBI Life have registered double digits growth of 39.92 per cent, 19.90 per cent, 30.59 per cent respectively. The first-year premiums collected by them for the April-November period was Rs 85.18 billion, Rs 25.76 billion, Rs 77.28 billion, respectively.