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Insurance
APE jumps 37.6% YoY in January 2012
Key points
The annual premium equivalent (APE) of the life insurance industry showed a jump of 37.6% year on year (YoY) and 10.4% month on month (MoM). The year-on-year (Y-o-Y) growth in the APE was mainly contributed by the Life Insurance Corporation of India (LIC), which reported a robust growth of 41.3% YoY. The private players also witnessed a rise of 31.5% YoY in their APE. The life insurance sector has started reporting growth on a Y-o-Y basis mainly due to the subsiding of the high base of the previous year (as new regulations were introduced from September 2010 onwards). However, on a year-till-date (YTD) basis (ie April 2011-January 2012), the APE of the industry continued to contract with the private players showing a higher decline (down 22.3% YTD) compared to a 3.9% growth shown by LIC.
The market share of the private players declined to 33% levels in January 2012 while that of LIC expanded to 67%. Among the private players, SBI Life's market share decreased to 10.9% from 13.7% in January 2011 while that of Reliance Life declined to 6.1% from 8.4% in January 2011.The market share of HDFC Standard Life Insurance grew to 13.7% from 12.5% in January 2011 whereas that of ICICI Prudential Life Insurance remained stable at 18%. The share of Max New York Life Insurance also grew to 7% as against 6.7% in
January 2011.
In terms of APE growth for January 2012, 14 out of 20 private players posted a decline Y-o-Y with Tata AIG Life Insurance Company showing the highest contraction of 32.8%. ICICI Prudential Life Insurance showed a growth of 53.5% YoY. On a YTD basis, the life insurance industry continued to report a decline in APE as the new unit-linked insurance policy (ULIP) guidelines set in and insurers awaited the clearance from the Insurance Regulatory and Development Authority (IRDA) for launching new products. Though premium collections will remain healthy in the next two month of the current fiscal (due to seasonality), the overall growth for FY2012 is likely to remain lower than in FY2011.
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