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MOSL: INDIA LIFE INSURANCE (INSURANCE TRACKER)-New business WRP growth picks up to 8.7% YoY in May-18

INDIA LIFE INSURANCE (INSURANCE TRACKER): New business WRP growth picks up to 8.7% YoY in May-18

Insurance industry new business wrp growth improved to 8.7% YoY (v/s +2.5% YoY in Apr-18). Private players reported 5.5% YoY growth (v/s +4.2% YoY in Apr-18) in new business wrp led by strong growth trends for SBI Life, Max Life, Birla Sunlife, Bajaj Life and Tata AIA. ICICI PruLife, however, reported 25% YoY decline primarly on account of high base (100% YoY growth in May-17). LIC reported new business wrp growth of 11.8% YoY (+63% MoM) led by strong pick-up in individual wrp (21% YoY growth vs 3% YoY growth in Apr-18).

Private players’ market share declines to 47.5% (49.9% in FY19YTD)
Private players’ share in total WRP declined to 47.5% in May-18 (-590bp MoM) affected by softer growth trends of few large private insurers even as LIC reported healthy 11.8% growth in wrp. Private players’ market share on an individual WRP basis stood at 51.1% (-352bp MoM). Amongst private players, IPRU remains the largest with wrp market share of 18.9% while SBILIFE’s market share stood at 18.7%.

Top-five private players now account for ~65% of total private industry
The market share of top-five private players: SBI Life, ICICI Prudential Life, HDFC Life, Max Life and Bajaj Allianz Life stands at ~65% thus pointing towards continued polarization of the industry. We note that amongst top five private players HDFC Life and Bajaj Allianz have gained the maximum market share during FY19 YTD. We expect larger private players to continue gaining market shares, led by their strong distribution, superior brand image and efficient customer service.