Top private players continued to grow in double digits.
Mumbai: The financial year has begun on a high note for the life insurance sector which registered a 41 per cent growth in new business premium for April and May to Rs 28,396 crore. Public sector behemoth Life Insurance Corporation of India (LIC) has registered 38 per cent in first year premium to Rs 18764 crore led by a strong growth in less profitable and risky group business.
On the other hand, private life insurance companies grew their new business premium by 46 per cent growth to Rs 9,631 crore during the period led by growth in both individual and group businesses.
The numbers came as a positive surprise as the first half of a financial year is usually a lean season for the life insurance industry with business picking up mostly in the fag end of the second half with the advent of the tax season.
Top private players continued to grow in double digits. During the two months upto May 31, Bajaj Allianz Life Insurance reported a growth of 33 per cent with a first year premium income of Rs 545 crore, HDFC Life Insurance grew by 69 per cent to Rs 2,624 crore, ICICI Prudential Life registered 31 per cent growth to Rs 1,328 crore, SBI Life Insurance grew by 75 per cent to Rs 1,842 crore, Max Life Insurance grew 22 per cent to Rs 488 crore.
On a annualised premium equivalent basis (APE) which takes into account 10 per cent of single premium business and 100 per cent regular premium, the private players grew by 30.5 per cent year to date driven by strong performance of HDFC Life, Kotak Life, Tata AIA Life and SBI Life.
According to Emkay Global Financial Services, "We continue to remain over weight on SBI Life and MAX Financial Services due to their consistent delivery in premium growth.
However, the stake sale overhang to Axis by Max Life for a perpetual Banca tie-up and the reduction of promoter stake by SBI Life Insurance to meet the minimum public shareholding guidelines could limit the upside potential of these stocks."