In the first four months of the current financial year, first-year premiums for life insurance companies grew by 44.25% (year-on-year) at Rs 82,146.47 crore, compared to Rs 56,949.06 crore crore in April-July of 2018-19. Life Insurance Corporation of India (LIC) grew at a faster pace compared to private insurance players, shows data from the Insurance Regulatory and Development Authority of India (Irdai). Market participants say that growth in insurance was largely due to the surge in group business and individual single premium business in the April-July period.
The data from Irdai shows that private players saw first year premiums at Rs 22,039.81 crore in April-July 2019, against Rs 17,369.32 crore in previous financial year a growth of 26.89%. While first year premiums for LIC stood at Rs 60,106.66 crore in the period during April-July compared to Rs 39,579.74 crore in previous financial year a surge of 51.86%. Life insurance industry posted a 28% growth in its annualised premium equivalent (APE) at Rs 24,312.5 crore in the first four months of this fiscal compared to the same period last year. Both private players as well as LIC witnessed 23% growth in APE, showed data from Kotak Institutional Equities. APE is the sum of annualised first year premiums on regular premium policies, and 10% of single premiums, written by insurance firms during any period from both retail and group policyholders. While APE for July grew by 13% and stood at Rs 7,153.1 crore compared to the previous financial year. "Strong growth mom-entum in individual business continues. Modest APE growth (20% yoy) in July 2019 for private players was driven by 22% individual APE growth while the group business was flat yoy," says Kotak Institutional Equities' report. Group single policies saw new business premiums for April-July at Rs 35,053.34 crore against Rs 32,969.55 crore in the previous financial year, a 6.32% growth.
"Over the last few quarters we have been significantly investing in strengthening our distribution network and empowering our sales force with simple and effective digital assets that enable them to have a better engagement with the customers. I believe this along with our approach on providing living benefits to our customers has enabled us to clock a robust growth of 40% in individual rated new business in July (as compared to last year),"said Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance.