Life insurance sector unfazed by demonetisation

On a year-on-year basis, private insurers and LIC grew at a robust pace of 42% and 38%, respectively

The life insurance sector seems to have emerged from the demonetisation process unscathed, as both Life Insurance Corporation (LIC) and private insurers reported double-digit growth during this period. The individual annualised premium equivalent (APE) grew 24 per cent for private life insurers and 15 per cent for LIC in November, compared to October. On a year-on-year (y-o-y) basis, private insurers and LIC grew at a robust pace of 42 per cent and 38 per cent, respectively.
 
In market share, ICICI Prudential Life and Max Life registered highest gains in November on a month-on-month (m-o-m) basis; HDFC Life and Bajaj Allianz witnessed the highest fall. Most bank-led insurers seem to have tapped on the higher footfalls this month, to register higher growth in their life insurance business.  Rise in financial savings by individuals in the wake of demonetisation could be another reason. Reliance Life, on the other hand, managed to arrest the decline in its market share and maintained the same in November. Overall, the share of private life insurers increased 190 basis points (bps) m-o-m to 52.7 per cent, with LIC holding the rest.