The private sector life insurance industry, comprising of 22 companies, after being hit by the regulations announced by Irda in September 2010, has only clocked 3% growth in new premium income 2010-11.
The LIC which has seen its composite premium income growing by 22% to R86,445 crore in 2010-11 has gained market share of almost 4% to 68.7% in terms of premium and 7% to 77% in garnering policies in the year. The industry has grown by 15% in new premium income to R125, 826 crore in 2010-11.
“Our Ulip to traditional policy ratio is estimated at 60:40 in 2010-11. We will like to maintain this level,’’ said DK Mehrotra, MD, LIC. Mehrotra said LIC is targeting a growth of 15% in policies and 25% in premium income in 2011-12.
The total premium for the entire private sector life insurance industry is pegged at R39,381 crore in 2010-11.
Some of the well known private sector life insurance companies have recorded a negative growth in 2010-11.
Bajaj Allianz Life Insurance at R3, 462 crore has seen a negative growth of 22% in new premium income during 2010-11. Other companies which have scored negative growth in new premium income during the reporting period are Reliance Life (23%, R3, 035 crore), Birla Sun Life (30%, R2, 077 crore).
Another development that brings cheer to LIC is that all major private sector life insurers have lost market share.
Although ICICI Prudential Life Insurance retained its number one position among private life insurers by recording a growth of 24% in total premium (R7,861 crore), it lost market share of over 3% during the year.
SBI Life which has recorded a total premium of R7, 571 crore during the year has lost its market share by 89 basis points. However, the company reported a 33% growth in net profit at R366 crore for 2010-11. “We are ploughing all out profit back to our operation,” said MN Rao, MD and CEO, SBI Life, adding that the company is targeting a growth of 35% in 2011-12. The persistent ratio of SBI Life rose to 69 % in FY11, from 58% last year.
Also the asset under management (AUM) jumped by 40% to R40, 163 crore at the end of March 31, 2011.
HDFC Life which has grown by 25% to R4,065 crore during the year has lost its market share by around 2%.
Some bancassurance players like Star Union Dai-ichi Life Insurance and Canara HSBC OBC Life Insurance, India First Life Insurance have done extremely well.
Star Union Dai-ichi Life Insurance has mobilsed a total premium income of R759 crore and gained a market share by 57 bps, while Canara HSBC OBC Life Insurance saw its premium income rise by R823 crore and gained a market share of 42 bps.
India First Life Insurance recorded a premium income of R705 crore in the reporting period and has gained market share of over 1%.
K Sahay, MD and CEO, Star Union Dai-ichi Life Insurance said, “We could sell overall premium worth R935 crore and registered a growth of 73% during the financial year. Our Ulip to traditional products comprise 90:10 in terms of premium and 70:30 in terms of number of policies. There was some impact of the Irda regulations on our business. We could sell only 98,000 policies during the year, as against the previous year’s mark of 108,000.”
Prashant Tripathy, director, strategic planning and business development, Max New York Life Insurance, said, “Post Ulip regulation period a true picture on how the sector performance is panning out to be. While on adjusted individual first year premium basis where the total industry and private insurers recorded a decline of 19% and 35% respectively during September to March 2011, Max New York Life’s grew by 8% to R1,081 crore
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