MOSL: INDIA LIFE INSURANCE (INSURANCE NEW BUSINESS TRACKER)-Private players maintain growth momentum despite high base

INDIA LIFE INSURANCE (INSURANCE NEW BUSINESS TRACKER): Private players maintain growth momentum despite high base

Private players reported 28% YoY growth in new business weighted received premium (WRP) in November 2017, led by strong growth trends for HDFC Life, SBI Life and Tata AIA. ICICI PruLife and Max Life too reported healthy sequential growth. LIC exhibited a muted performance, with its new business WRP growing only 2% YoY in the month. Combined growth for the industry thus stood at 14% YoY for November 2017. In FY18 YTD, the industry has grown at ~17% YoY, led by 23% growth for private players. LIC, on the other hand, reported lower WRP growth of ~12%. Our discussion with a few large insurers indicates that the traction in new business growth remains strong (despite a high base on account of demonetization). We thus expect private players to report 21% YoY growth in new business WRP in FY18 (implied growth of 19% over the remaining four months).

Private players’ market share expands 577bp to 52.1% in November and 236bp in FY18 YTD

Private players’ market share stood at 52.1% in November (+577bp YoY), led by strong 30% YoY growth in individual new business WRP v/s 15% YoY growth in group business WRP. LIC, on the other hand, reported a 43% YoY decline in group WRP, dragging its overall WRP growth to 2% – it reported one of the steepest market share falls in a single month. SBI Life, HDFC Life and Tata AIA were the key market share gainers among private players.

Proportion of individual business improves to ~85%

The composition of the more profitable individual business in total WRP improved to 85% for the industry (77% in FY18YTD). This was led by an increase for both private players and LIC. In November, individual business thus accounted for ~89% of total WRP for private players and ~85% for LIC. Among major insurers, ICICI PruLife, IDBI Federal Life, Max Life, SBI Life, PNB MetLife and Tata AIA Life have higher a proportion of business coming from the individual business. Market share of private players in the individual business expanded 3.7% YoY to 55% in FY18 YTD.​