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LIC's market pie continues to slip,down 200 bps to 44% in FY18

Another surprise in the year was the SBI Life toppling the market leader ICICI Prudential Life in market share sweepstake in the year. This is the third consecutive year of faster premium growth for the arm of the nation's largest lender clipping at 31 percent, according to the data collated by Wall Street brokerage Morgan Stanley today.

April 24, 2018 / 09:03 PM IST
1995-96 || Manmohan Singh’s last full budget announced a major financial sector reform plan, which set the stage for opening up a sector that was dominated by public sector companies. What reform is this? Ans: Singh proposed to establish an independent Regulatory Authority for the insurance industry that eventually led to the setting up of the Insurance Regulatory Development Authority (IRDA) of India.
(Image source: Reuters)

1995-96 || Manmohan Singh’s last full budget announced a major financial sector reform plan, which set the stage for opening up a sector that was dominated by public sector companies. What reform is this? Ans: Singh proposed to establish an independent Regulatory Authority for the insurance industry that eventually led to the setting up of the Insurance Regulatory Development Authority (IRDA) of India. (Image source: Reuters)

Private life insurers continued to yank down the market share of the national life insurer LIC, which fell by two notches to 44 percent in the just-concluded fiscal year 2018, while the former's increased to 56 percent from 54.

Another surprise in the year was the SBI Life toppling the market leader ICICI Prudential Life in market share sweepstake in the year. This is the third consecutive year of faster premium growth for the arm of the nation's largest lender clipping at 31 percent, according to the data collated by Wall Street brokerage Morgan Stanley today.

There was more surprises in the year: the largest three private life players - SBI Life, ICICI Pru and HDFC Life - enjoy as much as 57 percent of the market share of the private sector that has close to two dozen players.

The composition within the private sector is much different: the top three bank-backed insurers - SBI Life, ICICI Prudential and HDFC Life - now make up 56 percent of the private sector market share against 39 percent in FY09, the brokerage said.

Also, at 56 percent, this is just one notch (100 bps) down the highest market share that the private sector had notched up since they were allowed in 2000 at 57 percent in fiscal 2009, according to Morgan Stanley.

Close

The industry as a whole saw premium income grow slowing to 19 percent in FY18, down 300 bps from FY17 when they clipped at 21 percent.

While the private sector players grew at 24 percent against 26 percent in FY17, their market share improved further to 56 percent from 54 percent in FY17.

LIC's FY18 premium grew at 13 percent, down 200 bps from 15 percent a year ago, leading to a 200 bps drop in its market share to 44 percent from 46 percent in FY17.

Since FY09, there was only one year when LIC could claw back to above 50 percent market share.

LIC's overall poor show was driven by a low 5 percent premium growth in March 2018, down from 9 percent in February and 17 percent in March 2017, the report said.

According to the report, the premium growth declined 200 bps primarily because of the muted growth in March 2018 coupled with a strong base a year ago.

Industry individual premia grew at a strong 19 per cent in FY18, compared with 21 per cent a year ago. For March, premium growth was muted at 7 per cent against 10 per cent in February owing to a strong base of 25 per cent in March 2017.

While SBI Life grew fastest among large bank-backed insurers at 31 percent in FY18 against 39 percent in FY17, on a CAGR basis, it grew 35 percent between FY16 and FY18.

HDFC Life also grew at 31 per cent against a low 9 percent in FY17, while ICICI Pru clipped at lowest level at 16 per cent after a strong 29 per cent growth in FY17.

Kotak Life also gained 31 per cent against 28 percent, while Max Life grew 22 per cent (25 per cent). Tata AIA improved its rank in the private sector to No 6 from No 9, making it the largest market share gainer over the last three years (from 1.2 per cent in FY15 to 3.9 per cent among private insurers in FY18) after SBI Life.

Among agency-based insurers, Bajaj Life growth was strong at 38 per cent against 41 per cent in FY17, Reliance Life at 5 per cent against a negative 23 per cent and Birla Sunlife at 15 per cent against 35 per cent and lost market share in FY18.

For the industry as a whole, the premium growth in March was muted at 8 per cent against 11 per cent in February and 34 per cent in March 2017.
PTI
first published: Apr 24, 2018 08:58 pm

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