Friday, September 26, 2014

New Business Premium in Life Insurance Business

This article was first published in the IIB Bulletin, 2014, Vol. 1, Iss. 2, pp 8-10; Co-Authors: Siddharth Manvendra Chitre (IIB) & Anshuk Pal Chaudhuri (Gramener Technology Solutions Pvt. Ltd.)
https://iib.gov.in/IRDA/Articles/IIB%20Bulletin%20Q2%202014-15.pdf

The New Business Premiums in the Life Insurance business has witnessed a drop in premiums since the last few years due to uncertainties and changes in regulations. Financial Year 2013-14 saw a revival in the total New Business Premium. The Industry registered an overall growth of 11.5% on a base of Rs. 119,641 Crores of Total Premium. LIC had a growth of 17.82% in NB Premium during the year.

Over 83% of Current Year (FY13-14) Total Premium was from the top three Insurance Companies: LIC, SBI Life and HDFC Standard.


The highest YOY-Percent Change is by Edelweiss Tokio (69.85% on a base of Rs 80Crores current year total premium) while the lowest YOY-Percent Change is at Star Union Dai-ichi (-24.43% on a base of Rs 563crores current year total premium).




The size of the box indicates total premium received in crores (2013-14) and the colour indicates YOY growth profit (red is low, green is high). Visuals by Gramener.com  

Top Current Year Total Premium (in Crores)
Top YOY-Percent Change
Top Change YOY (in Crores)
LIC
90,124
Edelweiss Tokio
70.00%
LIC
13,636
SBI Life
5,067
Bharti Axa Life
51.00%
Reliance Life
557
HDFC Standard
4,037
Reliance Life
40.00%
IndiaFirst
365
ICICI Prudential
3,761
IndiaFirst
28.00%
Max LIFE
362
Bajaj Allianz
2,593
DLF Pramerica
26.00%
Bharti Axa Life
127
Bottom Current Year Total Premium (in Crores)
Bottom YOY-Percent Change
Bottom ChangeYOY (in Crores)
Sahara Life
65
Star Union Dai-ichi
-24.40%
ICICI Prudential
-1,047
Edelweiss Tokio
80
Tata AIA
-22.50%
HDFC Standard
-399
Aegon Religare
147
ICICI Prudential
-21.80%
Bajaj Allianz
-395
DLF Pramerica
174
Met Life
-19.90%
Star Union Dai-ichi
-182
Future Generali Life
225
Aviva
-13.70%
Met Life
-167

Private sector Insurers as a whole hold 24.61% of the market share of the Industry New Business Premium for the FY ending March 2014.

If we look at only private sector companies (leaving LIC out), YOY Percent Change was -4% on a base of Rs. 29,517 Crores of Total Premium. Over 44% of Total Premium were from the top three Private Insurance Companies : SBI LifeHDFC Standard and ICICI Prudential



The size of the box indicates total premium received in crores (2013-14) and the colour indicates YOY growth profit (red is low, green is high). Visuals by Gramener.com 

Top Current Year Total Premium (in Crores)
Top YOY-Percent Change
Top Change YOY (in Crores)
SBI Life
5,067
Edelweiss Tokio
70.00%
Reliance Life
557
HDFC Standard
4,037
Bharti Axa Life
51.00%
IndiaFirst
365
ICICI Prudential
3,761
Reliance Life
40.00%
Max LIFE
362
Bajaj Allianz
2,593
IndiaFirst
28.00%
Bharti Axa Life
127
Max LIFE
2,261
DLF Pramerica
26.00%
Kotak Mahindra Old Mutual
84
Bottom Current Year Total Premium (in Crores)
Bottom YOY-Percent Change
Bottom ChangeYOY (in Crores)
Sahara Life
65
Star Union Dai-ichi
-24.40%
ICICI Prudential
-1047
Edelweiss Tokio
80
Tata AIA
-22.50%
HDFC Standard
-399
Aegon Religare
147
ICICI Prudential
-21.80%
Bajaj Allianz
-395
DLF Pramerica
174
Met Life
-19.90%
Star Union Dai-ichi
-182
Future Generali Life
225
Aviva
-13.70%
Met Life
-167

If we look at category wise growth in New Business Premiums, the Individual Non-single premium (INSP) which is critical for long-term sustainability dropped by 3.96% for the Industry. Strangely, LIC's drop was more at 4.56%, as compared to the private sector which took a dip of 3.01%.

The highest YOY-Percent Change is at Group Single Premium (31.46% on a base of Rs. 50,448 crores Total Premium) increasing the share of this portfolio from 42% in FY2012-13 to 49% in FY 2013-14. 


The size of the box indicates total premium received in crores (2013-14) and the colour indicates YOY growth profit (red is low, green is high). Visuals by Gramener.com 

Current Year Total Premium (in Crores)
YOY-Percent Change
Change YOY (in Crores)
Group Single Premium
50,448
Group Single Premium
31.00%
Group Single Premium
12,073
Individual Non-Single Premium
43,740
Group Non-Single Premium
29.00%
Group Non-Single Premium
1,947
Individual Single Premium
16,887
Individual Single Premium
1.00%
Individual Single Premium
190
Group Non-Single Premium
8,567
Individual Non-Single Premium
-4.00%
Individual Non-Single Premium
-1,804
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