With the private sector garnering more market share, the life insurance industry’s premium collection at Rs 214,672 crore, has recorded a growth of 10.73 per cent in 2018-19, largely driven by individual non-single premium and group single premium.
However, the number of policies sold by the 24 players including the lone state-owned player, Life Insurance Corporation (LIC), has almost remained flat at 2.86 crore with a growth of 1.73 per cent. LIC, with a market share of 66.74 per cent, has further lost its market share to the 23 private market players in 2018-19. In 2017-18, it had a market share of 69 per cent. The number of policies sold by LIC at 2.14 crore has stagnated, recording a growth of 0.46 per cent during 2018-19.
According to figures compiled by IRDAI, 23 private players have mobilised a total premium of Rs 72,461 crore, registering a growth of 22.20 per cent. However, in terms of policies at 72.54 lakh, these players have just recorded a growth of 5.74 per cent. With a market share of almost 7 per cent, the listed HDFC Life has emerged as the largest private sector players and second largest life insurance player in the country. The life insurance venture between HDFC and UK-based Standard Life has also been the highest grosser of new premium among the private sector players at Rs 14,971 crore, up 32 per cent while total premium rose 24 per cent to Rs 29,186 crore.
Better pay, faster decisions give edge to private players
Private sector players are increasing their market share in the life insurance business which was completely dominated by the public sector earlier. What put them in a better position to handle competition are better pay packets, faster decision making, listing on the stock exchanges, a host of new product launches and marketing. Private players are banking on technological capability coupled with focus on innovation to put them in a good position to maximise the potential of protection and retiral opportunities. However, private players will have to find a solution to complaints regarding mis-selling of products, or unsolicited selling of insurance products to gullible customers, in order to remain in the race.
SBI Life, with a total new premium Rs 13,792 crore, up 26 per cent and with a market share of 6.42 per cent has consolidated its position as the second largest private sector player in the country. ICICI Prudential Life, with a market share of 4.78 per cent and with a new premium of Rs 10,251,up 12.43 per cent, has remained as the third largest private sector player in the industry.
Max Life with a new premium of Rs 5,169 crore, up 19 per cent, and with a market share of 2.40 per cent, has become the fourth largest player in the industry. “The private life insurance industry has seen a healthy growth of 20 per cent over the previous 2 years. In this backdrop, we would expect the industry to stabilise at a 13-15 per cent growth rate over the next two years,” said Prashant Tripathy, managing director & chief executive officer, Max Life Insurance.
“As part of our strong multi-channel distribution architecture we will continue to strengthen our relationships with large existing banccasurance partners as well as to build upon our agency footprint and expand the share of our proprietary channels to the tune of 35-40 per cent over the next 2-3 years,” Tripathy said.
Announcing the HDFC Life results, Vibha Padalkar, MD & CEO said, “Our continued focus on diversifying our distribution mix and maintaining a balanced product mix is underpinned by the growth of our proprietary channels and our dominant presence across all product segments. We believe that our technological capability coupled with our focus on innovation puts us in a good position to maximise the tremendous potential of protection and retirals opportunities.” Bajaj Allianz Life insurance, with a total new premium of Rs 4,922, up 15 per cent, is now the fifth largest player in industry during 2018-19. Kotak Mahindra Life Insurance with a new premium of Rs 3,977 crore, up 17 per cent, Aditya Birla Life with a new premium of Rs 3916 crore, up 47 per cent, Tata AIA Life Insurance, with a new premium income of Rs 2475 crore have also performed well in 2018-19.
The industry as a whole in the individual non-single premium, has generated a total new premium of Rs 66,000 crore, up 10 per cent in 2018-19, while in the group single premium, which are largely corporate pension investment, it has gathered a new premium of Rs 108,408 crore during the reporting year. Analysts said the growth in the individual non-single premium and deceleration in the individual single premium are positive trends in the industry.
Data released by the General Insurance Council showed the four main public sector insurers which have recorded a premium collection of Rs 68,719 crore, up 1.37 per cent, have ceded five per cent of their market share to the private sector insurers (excluding the stand alone health insurers) which have mobilised a total premium of Rs 81,600 crore, up almost 25 per cent, during 2018-19.