Insurance Q1 Review – APE Growth Steady, VNB Margin Improves: Motilal Oswal

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Annual premium equivalent growth remained healthy, between 15% and 78% YoY, for all industry players. SBI Life Insurance Company Ltd. was the outlier with robust growth momentum of 78% YoY in APE compared with 22%/25%/15% for HDFC Life Insurance Company Ltd. /ICICI Prudential Life Insurance Company Ltd./ Max Life, respectively.

Retail protection was weak for the industry during Q1 FY23. However, group protection was strong, fueled by improved disbursement momentum across lending institutions. This ensured growth in overall protection in the range of 15-45% YoY in Q1 FY23. Most of the players expect demand in individual protection to bounce back from Q3 FY23 onwards.

While group protection was strong for all players, we saw divergent trends in retail protection.

HDFC Life/Max Life reported a decline of 28%/19% in retail terms while ICICI Life also reported a decline due to reducing fear of pandemic and mortality along with a high base of last year.

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