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Published on 13/09/2018 11:47:52 AM | Source: Motilal Oswal Securities Ltd

India Life Insurance : Private players` new business WRP growth picks up to 15.4% in Aug-18 - Motilal Oswal

Posted in Special Event Reports| #Insurance Sector #Special Report #Motilal Oswal

Private players’ new business WRP growth picks up to 15.4% in Aug-18

Private players’ new business weighted received premium (WRP) growth picked up to 15.4 % YoY (v/s +12.6% YoY in July-18), in line with industry growth of 13.3% YoY (+4.4% YoY in July-18). New business WRP growth for private players can be ascribed to robust trends for Tata AIA, Birla Sun Life and Bharti Axa Life. Bajaj Allianz, PNB Met Life and Max Life, too, reported healthy growth. Larger listed players SBI Life, ICICI PruLife and HDFC Life reported tepid WRP growth of 11.7%, 7.1% and 11.9% YoY, respectively. LIC’s new business WRP grew 11.4% YoY and its market share improved by 114bp MoM to 51.7%. While private players have started the year on a softer note (FY19YTD growth of 11.5% YoY), we expect growth to recover to 16% YoY in FY19 (as the base effect wanes), driving their WRP market share to ~53% (v/s 51% in FY18).

 

Private players’ market share shrinks to 48.3% in Aug (49.9% in FY19YTD)

Private players’ share in total WRP contracted to 48.3% in Aug-18 (-114bp MoM), despite a pick-up in WRP growth to 15.4%. Private players’ market share on an individual WRP basis stood at 57.7% (+89bp MoM). SBI Life had the highest share (~24%) in individual WRP among private players, followed by ICICI PruLife (20.7%). On the other hand, LIC’s new business WRP grew by 11.4% YoY and its market share improved by 114bp MoM to 51.7%.

 

Top-five private players now account for ~66% of total private industry

The combined market share of the top-five private players – SBI Life, ICICI Prudential Life, HDFC Life, Max Life and Kotak Life – stands at ~66%, pointing toward continued polarization of the industry. However, a few other players like Tata AIA and more recently Birla Sun Life have been exhibiting healthy trends. Among the key listed players, on a WRP basis…

*  HDFC Life reported 11.9% YoY growth (+19% in FY19YTD), largely in line with our estimate.

*  SBI Life reported 11.7% YoY growth (+8% in FY19YTD), significantly below its historical run-rate.

*  ICICI PruLife reported 7.1% YoY growth (-9% in FY19YTD), much below our estimate.

*  Max Life reported 22.4% YoY growth (+24% in FY19YTD).

 

Mutual fund AUM increases 9.3% MoM to INR25.2t

Mutual fund AUM rose 9.3% MoM to INR25.2t in Aug’18, led by growth of ~41% MoM in money market schemes, ~4.2% in equity schemes and 4% in balanced funds. On the other hand, AUM of gold ETFs/income schemes declined ~3%/0.3% MoM in the month.

 

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