Insurers post better profits in FY17 on reduced expenses, bank-led growth biz

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Insurance companies have seen a bumper year for business in FY17 backed by reduction in expenses on one end and growth in bank-led business on the other. With a big jump in bank deposits during the demonetisation period, a lot of the excess funds have been used to purchase insurance or cross-sell these products to customers.

IndiaFirst Life Insurance, promoted by Bank of Baroda, Andhra Bank, and Legal & General announced an annual profit for the 3rd consecutive year of Rs 35 crore, which was a jump of over four times of the previous fiscal.

The company witnessed a new retail premium collection of Rs 403 crore by the end of FY17, as against Rs 221 crore in FY16, recording a year-on-year growth of 82 percent in individual annualised premium equivalent (APE). APE constitutes 100 percent of regular premium business and 10 percent of single premium business.

RM Vishakha, MD & CEO, IndiaFirst Life Insurance said that they have substantially surpassed their targeted y-o-y growth.

“This is purely a reflection of effective products, processes and distribution strategy resulting in improved productivity and reduced operational costs,” she added.

The country’s sole listed insurer, ICICI Prudential Life Insurance saw a marginal growth of net profit from the company reported profit of Rs 408.24 crore in Q4 of FY17 compared to Rs 402.95 crore in the corresponding quarter of the previous financial year.

Overall, the insurer's annualised premium equivalent grew by 28.1 percent. Savings APE stood at Rs 6364 crore in FY17, showing an increase of 26.5 percent over the previous fiscal. For the insurer, bancassurance was the largest channel contributing 56.9 percent of the APE.

For its sister entity, ICICI Lombard General Insurance, gross domestic premium income was at Rs 10725.9 crore for FY17. Net profit grew by 38.3 percent to Rs 701 crore for the fiscal.

Private life insurer Bajaj Allianz Life said that their growth in premiums was on account of a jump in individual rated new business. It reported 14 percent growth in new business at Rs 3,290 crore in FY17.

Tarun Chugh MD & CEO, Bajaj Allianz Life Insurance, said that they have seen a significant growth of 41 percent in the individual rated premium as against the industry growth of 21 percent. Further, the company also reduced overall expenses by 4 percent in FY17 over FY16.

The insurance regulator had brought a new set of regulations on the expenses of management listing out the maximum expenses allowed under every category. This has encouraged many insurers to reduce overall expenses and bring about operational efficiency.

Bajaj Allianz General Insurance posted a 29.8 percent rise in net profit at Rs 728 crore for FY17. The Gross Written Premium (GWP) of the company increased by 30.3 percent to Rs 7687 crore in FY17.

The company also reported an underwriting profit of Rs 62 crore in FY 1617 and improved its combined ratio to 96.8 percent in FY17 as against 99.3 percent.

The biggest advantage from demonetisation has been seen by insurance entities promoted by large banks. State Bank of India and BNP Paribas Cardif promoted SBI Life Insurance saw a 31 percent growth in net profit Rs 336 crore in Q4 of FY17.

For the financial year 2016-17, SBI Life reported a PAT of Rs 955 crore, an increase of 11 percent compared to the previous fiscal.  It said that they became the first private life insurer to cross Rs 10,000 crore in new business premium. Their individual new business premium (APE Basis) rose to Rs 5,936 crore in FY17 recording a growth of 39 percent compared with Rs 4,276 crore in FY16.

Arijit Basu, MD & CEO, SBI Life, said, “With 39 percent growth in the individual new business premium (APE Basis), we have entered the 17th successful year of operation and command more than one fifth of the private life insurance market.”

In this financial year, SBI Life aims to bring out an initial public offering to be listed on the stock markets. It has already begun the process for this and it is anticipated to be listed by the fourth quarter of FY18.