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

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

Private players reported 22% YoY growth in new business weighted received premium (WRP) in December 2017, led by strong growth trends for HDFC Life, SBI Life and Kotak Life. ICICI PruLife, however, reported a flattish month (53% YoY growth in Dec-16), while Max Life reported modest growth of 16% YoY in new business annualized premium equivalent (APE). LIC reported new business WRP growth of 16% YoY on a benign base; however, on a sequential basis, the trend was flattish, unlike 34% MoM growth for private players. Combined growth for the industry, thus, stood at 19% YoY in December 2017, as against +14% YoY in the previous month. In FY18 YTD, the industry has grown at ~17% YoY, led by 22% growth for private players, while LIC reported relatively modest growth of ~12%. While we are pleasantly surprised by the strong growth momentum for the private players, we maintain our 21% YoY new business WRP growth estimate for FY18 (implied growth of 19% over the remaining three months).

Private players’ market share improves to multi-year high of 59% in Dec-17 (50% in FY18YTD)
Private players’ market share stood at 59% in December 2017 (+124bp YoY/+693bp MoM), led by strong 22% YoY growth in individual business APE (as against 13% YoY growth for LIC). Private players reported strong momentum MoM in individual new business APE. On the other hand, LIC reported 12% MoM decline in individual new business APE, resulting in one of the steepest market share falls in a single month for LIC. SBI Life, HDFC Life and Kotak Life were the key market share gainers among private players.

LIC's reliance on single premium remains high; average premium per policy improves for private players
The composition of single premium in total premium income remains high for LIC at 75%, while for private players it stood at ~28%. This continues to impact WRP-based market share for LIC. Otherwise, on an un-weighted basis, LIC's market share stands at ~62%. Average premium per policy increased ~7% YoY for private players, but
declined 5% YoY for LIC. Private players' share in total policy volume increased slightly to 28% in December 2017.