Life insurance companies, which saw a degrowth in new business premium figures in the first half of this fiscal, are pulling out all stops to rake in an overall 15% growth for the year. Betting on the last two quarters, which historically fetch the largest sales, private companies are aggressively focusing beyond just the topline or new business premium growth. Renewal premiums, innovative products and reduced operational costs are keywords for almost every insurer these days.
The private insurance industry registered a degrowth of 14% during the first six months and almost every private life insurance company except for a handful of new players saw new business premium plummeting.
An industry observer said that in order to garner a 14-15% growth for the entire year, most companies have to almost double their numbers in the third and fourth quarters. However, this could be achievable if the entire premium including the renewal premium is taken into account, the analyst said.
S B Mathur, secretary general, Life Insurance Council said, “I think that the total premium would grow by around 15% in the year. The growth of 10-12% in new business premium would continue, I feel. The first six months saw a robust 40% growth in renewal premiums and all companies are focusing on this in a big way.”
DNA Money also caught up with a host of private insurance companies to track the change in aggression. V Vaidyanathan, MD & CEO, ICICI Prudential Life, the largest among private life companies, which suffered a degrowth in new business premium of over 35% in the first half of the year, said, “We have already started to see growth in the industry in the second half of this financial year.We expect the fourth quarter to see robust improvement as general economic sentiment has improved.”
“We are focusing on improving profits by introducing new products which cause less strain. Also, we are reducing our expenses by reworking our business model. We expect the company to become profitable soon.”
T R Ramachandran, MD & CEO, Aviva India, “Market volatility did impact sales of Ulips and this had an impact on the performance of private players as nearly 90% of Ulip business comes from them. In the second half of the year, we see a tempered growth at 10-15% for the entire industry. With the volatility in the stock markets, companies are also redefining product portfolios to include protection and capital guarantee products and not be a one-trick pony with just Ulips, though these products will continue to be the growth drivers.”
“At Aviva, we have been seeing a month-on-month growth and overall we have recorded a 19% year-on-year growth as of October (inclusive of renewal premiums). We are looking to launch a couple of new products soon in the micro insurance and traditional plans space, subject to regulatory approvals,” he said.
HDFC Standard Life is betting on a 14-15% growth this year and is likely to close the year with a new business premium of almost Rs3,000 crore. It suffered a 14% degrowth in new business premium during the first half of the year. Paresh Parasnis, principal officer and executive director, HDFC Standard Life, said, “True, the market was tough and most companies including ours registered degrowth. But since October, we feel that the customer confidence is returning and hence with increased need-based selling and value added products, a growth is imminent.”
KS Gopalakrishnan, CFO and appointed actuary, Aegon Religare, said that on a month-on-month basis, the industry is seeing a positive momentum. “The potential for the savings and protection business in India continues to remain huge. The economic climate has improved in the past few months and the overall sentiments remain positive.
While leveraging SBI’s strong brand equity, M N Rao, managing director and CEO, SBI Life said, “It is true that we have to exert ourselves a little bit more in the remaining months of the fiscal. We are looking at a 25% growth during the year. With an upturn in new business due to the economic revival, we would make good profits.”
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