The insurance sector has posted sluggish growth in April. Many of the private insurers and the Life Insurance Corporation of India (LIC) clocked mild de-growth too on a monthly basis.
According to reports by brokerages, the individual Annualized Premium Equivalent (APE) of private entities registered about 2% YoY growth in April. Public entities LIC and SBI Life also posted low single-digit growth.
One of the reasons growth looks moderate is due to a high base. Earlier in April 2024, private insurers posted a 24.7% Annualized Premium Equivalent (APE) growth vs 2 percent last month.
APE is the standardized metric used in the insurance sector to measure new business sales. It is the sum of annual regular premiums and 10 percent of single premiums.
Insurance sectors: What’s hindering growth?
The strong growth base in the first half of the financial year 2025 and the relatively volatile market are among the key reasons for the slowdown in the growth of the insurance industry, says a report by Emkay Global Financial Services.
Furthermore, the change in the surrender value (the amount the insurer must return to the policyholder when they cancel the policy early) has also resulted in companies reviving some of their products and has a bearing on overall returns.
The insurance companies are reducing the policies with small ticket sizes or premiums due to profitability concerns. Also, the agents are shifting their focus to the higher ticket size policies. This has, in turn, reduced the total insurance sales for the companies.
Performance of key insurers in April
A look now at how key insurance companies performed-
HDFC Life’s total APE grew by 7.7 percent YoY in April. The company’s individual or retail APE grew by only 3.3 percent, YoY, in April. In contrast, in April 2024, its individual APE posted an overwhelming 30 percent YoY growth. Additionally, the company’s market share in individual APE reached 11.5 percent, a 37 basis point YoY improvement (1 bp = 0.01 percent).
ICICI Prudential Life Insurance posted a 14.4 percent YoY decline in its individual APE in April. However, the company’s group APE registered a high YoY growth of 28 percent in its group APE in the same month, leading to a 5.3 YoY decline in its total APE.
SBI Life also saw slow growth in its individual APE. The company saw a YoY growth of just 2.4 percent in its individual APE in April. The company’s individual APE market share increased by just 36 basis points to 15.2 percent in April.
LIC’s performance was even lower than the private players. The company posted a 3.7 percent YoY decline in its individual APE in April. Its total APE saw a YoY decline of 0.8 percent in the same month. Bajaj Life also posted a 2.2 YoY decline in its individual APE.
Axis Max Life outperforms peers
Axis Max Life is the only company to post a double-digit YoY growth in its individual APE in April. It has posted a 23.5 percent YoY growth in the individual APE in April. The company also had a high base as it registered a YoY growth of 32.1 percent in the corresponding month last year.
Axis Max Life’s growth is primarily driven by its newly launched NPAR and high sum assured linked products. In April, the company’s market share reached 6.4 percent in the individual APE market, a YoY growth of 122 basis points.