The life insurance industry is expected to see flat growth in annualised premium equivalent (APE) in FY21, according to a Kotak Life Insurance outlook.
Speaking at a virtual event, G Murlidhar, MD & CEO of Kotak Life Insurance said that the industry saw a 7 percent de-growth YoY in APE in H1FY21. In the same period, Kotak Life had a 2 percent growth in APE.
APE refers to 100 percent regular premiums and 10 percent single premiums collected by an insurer.
When it comes to individual new business, the industry saw 1 percent YoY growth to Rs 46,839 crore in H1 while Kotak Life saw 16 percent YoY growth.
"We expect the full-year industry growth to be flattish or slightly positive. Kotak Life will see a better-than-industry growth," he added without disclosing exact APE growth predictions for the company.
Going forward, Kotak Life expects the life insurance industry to sustain growth rates of around 15 percent levels in the next five years.
Murlidhar said that the key factors driving this growth are the increasing customer awareness and willingness, preference for transactions through digital platforms and the ability of insurers to deliver personalised offerings.
He added that demographical factors continue to be favourable with a young population and growing working-age group, increasing incomes, and an under-penetrated market.
"India is a highly underpenetrated market with life insurance penetration at under 3 percent. Within financial savings, insurance has been an important instrument for long-term savings. Approximately 23.2 percent of total household financial assets are in a life insurance fund," he added.