MUMBAI: While India’s general insurers struggled with a decline in premium collections last month, life insurance companies continued to show robust growth, particularly in the private sector.
General insurers posted a 6.53 per cent dip in gross written premium in September, with major players experiencing only modest growth. ICICI Lombard, for instance, reported just a 3.6 per cent rise in premium collections for the month and a 15.52 per cent increase for the quarter.
New India Assurance saw an 8.86 per cent gain in September, but its quarterly growth remained subdued at 3 per cent. GO Digit recorded 5.46 per cent growth for September and 11.52 per cent for the first half of the fiscal year.
Star Health posts strong gains
In contrast, Star Health Insurance posted strong gains, with an 18.41 per cent rise in September and a 17 per cent increase for the quarter, showcasing the differing trajectories within the insurance industry.
Amid this backdrop, India’s life insurance sector stood out with a 14 per cent year-on-year growth in new premium collections in September. Private life insurers outpaced the state-owned Life Insurance Corporation (LIC), posting a 16 per cent increase compared with LIC’s 12 per cent rise.
Listed private players like ICICI Prudential Life and Max Life led the charge with impressive growth in annualised premium equivalent (APE), reporting 34 per cent and 37 per cent increases, respectively.
Surge in sale of ULIPs
This growth for life insurers comes despite new regulatory pressures surrounding surrender charges, which took effect on October 1. The strong performance was further supported by a surge in the sale of unit-linked insurance plans (ULIPs), driven by buoyant equity markets and policyholders seeking higher returns.
As insurers adapt to the new regulatory environment by adjusting product premiums and agent commissions, the industry is expected to continue expanding, with a projected 15 per cent APE growth for the quarter.
The shift towards non-traditional products like ULIPs, annuity, and non-participating policies is anticipated to bolster value of new business (VNB) margins, according to a report by Motilal Oswal.
