MUMBAI: State-run insurance giants, Life Insurance Corporation (LIC) has further increased its dominance in India’s life insurance market with a six percent jump market share between April to September. The insurance giant’s share in the overall pie now stands at 72 percent in a market where several state-run life insurers are increasingly outdoing their private competitors in getting new businesses.
LIC registered a business growth of 18 percent in September against last year, and a very robust 42 percent in the first half of the financial year between April and September, the latest data released by insurance regulators IRDAI showed.
“Recent months have seen strong new business growth for LIC taking its market share to 72%…Retail business has shown strong traction with a 22 percent growth in the first half of the fiscal, on the back of new launches in the individual single premium segment,” according to a report by brokerage Jefferies.
However, the ongoing economic slowdown seems to have finally caught up with the insurance sector. Individual Annual Premium Equivalent (APE) declined 3% in September as against the same period last year September as compared to 11-27% year on year growth in April to August 2019.
APE is a measure used for comparison of life insurance revenue by normalising policy premiums into the equivalent of regular annual payments. The metric is particularly used when the sales contain both single premium and regular premium businesses.
“Even the high-growing HDFC LifeNSE 3.40 % declined after five months of consistent high growth. SBINSE 0.50 % Life and Max Life continued to moderate for the second consecutive month,” as per a brokerage report by Kotak Securities. “Net inflows to equity mutual funds dropped sharply mom as well.”