First-year premium for all 23 private life insurers grew over 15% year-on-year in the three months to June but for state-owned LIC, growth fell 2% y-o-y. Most private insurers enjoyed a first-mover advantage as they quickly rolled out revised products after regulations were changed. The annualised premium equivalent matrix the sum of the regular annualised premium from new business and 10% of the first single premium in a period reflects a similar picture: Private insurers grew 14% y-o-y in Q1FY15 versus LICs growth of 2% and the industrys 6%.
The private sectors out-performance was largely driven by insurers with a strong bancassurance channel. For instance, HDFC Lifes new business premium grew 41%, while ICICI Prudential reported 36% growth. In contrast, Reliance Life, an agency channel-driven insurer, saw just 4% growth. Category-wise, growth in sales of individual single-premium policies topped the list. Against the industrys 32%, LICs growth in this category was 34% and that of private players was 26%. For the industry, low-margin group insurance premiums declined 7% y-o-y.
Over the last four years, the industry was in a state of flux as it had to face headwinds like a host of regulatory changes, deteriorating distribution structure, weak macro environment and declining household savings rate. The latest numbers suggest the sector is turning a corner and, if the household savings rate grows, the sector could see stronger growth rates, too.