Post the rush to lock investments in LIC’s higher yield product till November, the individual premium growth of life insurers moderated in December. Much of the growth in December was supported by private life insurers.
In December, individual business of life players grew by 17 per cent. LIC grew by 5 per cent, while private insurers clocked 26 per cent growth.
Falling bank interest rates has been seeing retail investors rushing to lock their money in single premium products till October-November. LIC has been leading the growth as its Jeevan Akshay VI annuity policy, which offered better returns in comparison with the prevailing interest rates, was closing during that period. Till October LIC was registering individual annualised premium equivalent (APE) growth of over 100 per cent. It moderated to 38 per cent in November and by December it was sluggish to 5.3 per cent.
However, private life insurance companies continued their momentum post demonisation and delivered 26 per cent growth in individual APE in December 2016, finds a study by Kotak Institutional Equities. Though the December growth is lower than 42 per cent in November, it is higher than the 20 per cent growth during April-October 2016.
"December saw reasonable traction in business activities. There is a positive build-up of customers’ enquiries. I expect the last quarter to be better than the year so far. Kotak Life Insurance is looking forward to accelerating in the last three months of this financial year," said Suresh Agarwal, executive vice-president and head of distribution & strategic initiatives, Kotak Mahindra Old Mutual Life Insurance.
Private life insurance players had reported strong 42 per cent growth in individual APE in November 2016 as fallout of large funds moving into banks. “Strong inflow continuing in December reinforces our thesis of buoyancy in the sector due to increase in financial savings; demonisation has become a catalyst for the same,” the report added. Net inflows to equity mutual funds were strong highest in the past 18 months and overall inflows in third quarter of FY17 were highest in the past six quarters.
Trends among large players were mixed with solid growth for ICICI Prudential Life and Max Life, moderate for SBI Life and decline for HDFC Life.
ICICI Prudential Life continued its growth momentum, delivering 53 per cent growth in individual APE, which was likely driven by ULIPs. The average ticket size was up 20 per cent yoy.
Max Life delivered 39 per cent growth in individual APE, supported by 25 per cent growth in average ticket size. SBI Life, despite its high growth momentum in the past few quarters, was muted with 11 per cent growth in December individual APE.
HDFC Life continued to decline by 16 per cent y-o-y. Among other players, Bajaj Allianz retained strong momentum with 70 per cent growth on the back of 38 per cent y-o-y growth in average ticket size. Star Union Daichi and India First delivered 80 per cent growth. Birla SL was up 94 per cent on the back of 54 per cent increase in average ticket size.
sangeethag@mydigitalfc.com
In December, individual business of life players grew by 17 per cent. LIC grew by 5 per cent, while private insurers clocked 26 per cent growth.
Falling bank interest rates has been seeing retail investors rushing to lock their money in single premium products till October-November. LIC has been leading the growth as its Jeevan Akshay VI annuity policy, which offered better returns in comparison with the prevailing interest rates, was closing during that period. Till October LIC was registering individual annualised premium equivalent (APE) growth of over 100 per cent. It moderated to 38 per cent in November and by December it was sluggish to 5.3 per cent.
However, private life insurance companies continued their momentum post demonisation and delivered 26 per cent growth in individual APE in December 2016, finds a study by Kotak Institutional Equities. Though the December growth is lower than 42 per cent in November, it is higher than the 20 per cent growth during April-October 2016.
"December saw reasonable traction in business activities. There is a positive build-up of customers’ enquiries. I expect the last quarter to be better than the year so far. Kotak Life Insurance is looking forward to accelerating in the last three months of this financial year," said Suresh Agarwal, executive vice-president and head of distribution & strategic initiatives, Kotak Mahindra Old Mutual Life Insurance.
Private life insurance players had reported strong 42 per cent growth in individual APE in November 2016 as fallout of large funds moving into banks. “Strong inflow continuing in December reinforces our thesis of buoyancy in the sector due to increase in financial savings; demonisation has become a catalyst for the same,” the report added. Net inflows to equity mutual funds were strong highest in the past 18 months and overall inflows in third quarter of FY17 were highest in the past six quarters.
Trends among large players were mixed with solid growth for ICICI Prudential Life and Max Life, moderate for SBI Life and decline for HDFC Life.
ICICI Prudential Life continued its growth momentum, delivering 53 per cent growth in individual APE, which was likely driven by ULIPs. The average ticket size was up 20 per cent yoy.
Max Life delivered 39 per cent growth in individual APE, supported by 25 per cent growth in average ticket size. SBI Life, despite its high growth momentum in the past few quarters, was muted with 11 per cent growth in December individual APE.
HDFC Life continued to decline by 16 per cent y-o-y. Among other players, Bajaj Allianz retained strong momentum with 70 per cent growth on the back of 38 per cent y-o-y growth in average ticket size. Star Union Daichi and India First delivered 80 per cent growth. Birla SL was up 94 per cent on the back of 54 per cent increase in average ticket size.
sangeethag@mydigitalfc.com
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