“The private sector has a larger share in the non-single sub-segment (mainly individual premiums), while LIC continues to dominate the single premium sub-segment,” CARE Ratings said. Pension plans, general annuity and group gratuity schemes continue to account for a significant chunk of the group, while general annuity plans dominate individual single premiums, it said.
According to Emkay Global, despite relatively better growth by LIC in February, LIC’s retail weighted received premium contracted in two years through February, while it grew at an annualized rate of 10.5% for private peers. “This divergent growth trend has led to the private sector gaining 7-percentage-point market share from LIC in the last two years.”
Given the recent slowdown in growth, a stronger base of March 2021 and the current macroeconomic and geopolitical situation, Emkay Global expects the sector’s FY22 growth to be a tad lower than year-to-date FY22.
For the life insurance industry, short-term disruptions have little impact on business and should be ignored, the brokerage said. Beyond near-term turbulence, the sector’s RWRP growth should broadly track nominal GDP growth, with private leaders growing faster than that and LIC growing slower.
“After the sharp correction in recent months, listed life insurance stocks are valued attractively, trading materially below their pre-Covid price-to embedded value multiples,” Emkay Global said.