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Life Insurance Corporation of India outpaced private insurers’ year-on-year revenue growth in October.
India’s life insurers’ revenue growth was aided by a rise in group category premiums. The industry’s new business premium stood at Rs 24,917 crore in October 2022, according to provisional data released by the Life Insurance Council.
That is 10% higher than the revenue in October 2021, while rising 37% over the same month in pre-pandemic 2019. The growth happened despite a 17% year-on-year fall in the number of policies sold over a year ago.
Revenue growth was led by the group category of policies—single, non-single, and yearly renewable premiums. The group single category, which constitutes 56% of the revenue for October, was up 29% year-on-year.
Sequentially, revenue fell 21% over September, with a 17% fall in the number of policies.
“On expected lines, the Indian life insurance industry reported muted growth in new business for October-22, with retail annualised premium equivalent for the industry clocking a soft 3.1% year-on-year, thus leading to a slowdown in year-to-date FY23 retail APE to 16.2% in October 2022 from 18.7% in September 2022,” according to Emkay Global.
The growth slowed in October as a volatile capital market outlook hurt demand for Ulips, weakness continued in the retail protection segment and bank partners increased focus on deposits. A higher number of holidays in the month also impacted growth.
Key Highlights
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LIC’s revenue rose 16% over October 2021 to Rs 15,920 crore despite strong growth in group single and non-single category premium.
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Retail non-single premiums grew year-on-year, but fell 20% sequentially.
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New business premium of private insurers rose 6% year-on-year to Rs 8,996 crore in October. Sequentially, the premium fell 22%.
According to Care Ratings, LIC continued to dominate the single premium sub-segment, especially the group business, while the private sector had a larger share in the non-single sub-segment (mainly individual premiums).
“Within the group single premium segment, pension plans, general annuities, and group gratuity schemes continue to account for a significant chunk, while general annuity plans dominate individual single premiums,” the report said.
How India’s listed private insurers fared in October 2022:
SBI Life Insurance Co.
ICICI Prudential Life Insurance Co.
Emkay Global said that notwithstanding the near-term growth challenges, private sector leaders with sturdy brands and distribution will deliver stronger growth in the medium term, along with stable-to-improving new-business margins.
“However, in the near term, overall sector growth concerns and company-specific challenges will continue to weigh on life insurance shares,” it said.
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Image and article originally from www.bqprime.com. Read the original article here.