Moderation in development of protection company from peak levels appears to have been arrested (person non-single sum assured to person non-single premium for private players was flat month-on-month m-o-m at 25X compared to 23X in December 2020.
Individual annualised premium equivalent (APE) development was robust at 23% year-on-year (y-o-y) in February 2020 larger than -7% to +14% y-o-y transform more than June 2020-January 2021. Pick-up in unit-linked insurance coverage plans (Ulips) and robust demand for non-par savings are probably drivers. SBI Life reported stellar 53% y-o-y development in person life followed by Max Life at 32% y-o-y. ICICI Prudential Life was up 6% y-o-y decline has probably been arrested due to a transform in base (down 15% y-o-y in February 2020). HDFC Life was robust at 16% y-o-y (in spite of higher base).
Individual APE development robust for private players Individual APE for the private sector elevated 23% y-o-y in February 2020 larger than -7%-15% y-o-y transform given that June 2020. Base was weak with only 4% y-o-y development in February 2020, probably following a robust December-January 2020. Pickup in person company indicates additional enhance in demand for Ulips led by rally in capital markets and robust demand for non-par savings solutions.
Moderation in development of protection company from peak levels appears to have been arrested (person non-single sum assured to person non-single premium for private players was flat month-on-month m-o-m at 25X compared to 23X in December 2020.
Overall APE was up 21% y-o-y as group APE was muted at 2% y-o-y although group credit company probably picked up additional, group employee-employer volumes have a tendency to be volatile. Group sum assured was up 35% y-o-y. LIC’s person APE development was low at 9% y-o-y in spite of a low base (down 7% y-o-y in February 2020).
Highlights of essential corporations ICICI Prudential Life: It reported 6% y-o-y enhance in person APE. Its low base (down 15% y-o-y in February 2020) appears to have caught up. With growing partnerships with new banks and low base sustaining till July 2021, headline development may possibly stay robust. Individual protection declined 25% y-o-y indicating weakness in protection. Overall APE was down 4% y-o-y owing to 49% y-o-y decline in group APE.
SBI Life: Individual APE was up 53% y-o-y drastically larger than -6%-14% y-o-y transform post September 2020. Pickup in Ulips, traction in the newly launched par item and robust development in non-par savings are probably drivers. Individual sum assured was up 30% y-o-y retail protection has probably held on improved than business typical (person sum assured down 18% y-o-y for private players in February 2021 although person APE elevated 23% y-o-y). Group APE was up 59% y-o-y group sum assured up 9% y-o-y.
Max Life: Individual APE was up 32% y-o-y although person sum assured was down 1% y-o-y indicating that development was probably driven by non-par. Group APE was up 38% y-o-y although group sum assured elevated 3.3X y-o-y indicating robust traction in credit defend company this is margin accretive for the enterprise.
HDFC Life: Reported 16% y-o-y enhance in person APE in February 2021 (24% in January 2021) on a higher base of 29% y-o-y development in February 2020. Group APE was up 34% y-o-y probably reflecting traction in the newly launched group protection item group sum assured was muted at 5% y-o-y.
Edited excerpts from Kotak Institutional Equities Research report