Annual sales data for India’s life insurance industry for 2010-2011 are now available.
Indeed, this year has been a turbulent year for the industry since the new ULIP rules came into force on September 1, 2010. In some cases, retail players in life insurance have experienced a 35% drop in sales since the new rules were introduced. effective for the corresponding period of the previous year. However, the overall decline was masked by strong performance in the first half of the year. Gradually, the life insurance industry is gaining momentum after regulation and reported a decline in sales in March 2011. LIC, India’s largest insurance father, will benefit the most from the new regulation.
Overall, the life insurance industry grew by 15% compared to the previous year. The industry reported a new premium for customers of 1.26 million rupees in the 10-11 financial year, compared with 1.09 million rupees in the 9-10 fiscal year. However, much of this growth was caused by LIC, which increased the premium by 22% to 86,444 crore compared to the previous 70,891 crore. At the same time, LIC increased its share of the overall life insurance market by 4%, from 64.86% to 68.7%.
The retail life insurance companies, with a combined premium of 39,381 crore and a market share of 31.3%, recorded only a 3% increase in premiums for new businesses during the event. However, this is only part of the story. It is reported that in the last six months since the entry into force of ULIP rules in the private life insurance industry there has been a significant slowdown, masked by higher rates before the rules come into force.
The premium for the new business and the market share of private players looks like this. New Business Premium is in (Crs) and market share as a percentage
Market share
ICICI Prudential 7861, 6,3%
SBI Life 7571, 6,0%
HDFC Life 4065, 3,2%
Bajaj Allianz 3462, 2.8%
Reliance Life 3035, 2,4%
Birla Sunlife 2077, 1.7%
Max New York 2060, 1.6%
Tata AIG 1331, 1.1%
Kotak Mahindra Old Mutual 1253, 1,0%
Canary HSBC OBC Life 823, 0.7%
Star Union Dai-ichi 759, 0,6%
Aviva 745, 0.6%
India First 705, 0,6%
With Life 704, 0.6%
ING Youss 660, 0.5%
Shiram Life 575, 0.5%
Future of Generali Life 449, 0.4%
IDBI Federal 445, 0,4%
Bharti Axa Life 362, 0.3%
Aegon Religar 275, 0.2%
SaharaLife 91, 0,1%
DLF Pramerica 74, 0,1%
Total 39,381, 31.3%
Obviously, the top five private players include ICICI Prudential, SBI Life, HDFC, Bajaj Allianz and Reliance Life, while 14 life insurance companies have a market share of less than 1%. A detailed overview of corporate bonuses from private companies provides a list of companies that have experienced a significant increase in bonuses but have somewhat lost. IndiaFirst Life has shown a significant increase in premiums by 250%, albeit on a much lower basis. DLF Pramerica and Aegon Religare also showed small growth, but canara HSBC Oriental, HDFC Life and ICICI Prudential Life were the most impressive growth, all of which grew by 25%.
India’s first 250%
DLF Pramerica 98%
Aegon Religion 83%
Star Union Dai-ichi 46%
Shiram Life 37%
Canara HSBC OBC Vie 29%
HDFC 25% standard
ICICI Prudential 24%
However, several private life insurance companies have shown significant declines. MetLife, which has lost its relationship with Axis Bank, has faced a 34% drop in premium income (this is the latest shortlist for NBI Banking and Insurance relations and could potentially offset lost positions). Birla SunLife’s premium for the new business was 30% lower than last year, while Bajaj Allianz Life Insurance’s premium was down 22%.
It would be interesting to see how the life insurance industry is doing in the current financial year, which will be the first full year since the ULIP turnover regulation came into force. In the long run, the changes will be beneficial to the life insurance market in India. The pension product, which accounted for 30% of the market and was effectively killed by the new rules, will also be implemented this financial year as IRDA plans to amend its guidelines. Overall, this year promises to be interesting.