Page 11 - Insurance Times March 2017 Sample

Private Life Insurance

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Private insurance pre- Reliance Nippon Life Insurance seeks to expand reach
mium grows after Reliance Nippon Life Insurance Company Ltd is look-
ing to acquire a peer as part of its strategy to ex-
demonetisation pand its distribution network.
Insurance premium paid by individu- The company, a joint venture of Reliance Capital Ltd
als in December post demonetisation and Japan's Nippon Life Insurance Company, is look-
rose 17%, with a big boost visible ing to acquire a peer that has a bank partner and
among private insurers, whose an established distribution channel. It is also in talks
growth during the month topped that with some banks for a bancassurance tie-up.
of the industry. In any case, growth "With over 20 insurance players in the Indian Insur-
in insurance premium paid is a robust ance market, there is bound to be consolidation in
20% in the nine months to December. this sector," said Sam Ghosh, executive director and group CEO, Reliance Capi-
Private insurers' market share contin- tal Ltd.
ued to grow, even through the de- India's life Insurance sector is dominated by companies that get more than
monetization phase. In December, it half their revenue through sales from bancassurance channels, said the com-
was 53% of the total, while LIC'S pany. "We are also in talks with some large banks for a bancassurance tie-up
share was lower at 47%. and hope close some distribution partners soon" said Ghosh.
No sudden surge in Life insurance industry
HDFC Life in the path of
The view that life insurance segment is see-
'Pragati' ing a surge in business can be wiped out com-
HDFC Life has stretched its consumer pletely. For instance, stocks of Max Financial
segment to include the economically Services and HDFC, which saw an exponential
weaker sections with the HDFC Life rise in their prices when the HDFC Life-Max
Pragati policy. With Pragati, HDFC Life merger was announced, haven't seen
Life wants to offer the dual benefit of much incremental gains after the initial surge.
systematic savings (with guaranteed This goes for Aditya Birla Nuvo and Exide Industries too. They are just sustain-
premium returns) and wholesome life
protection. Sujoy Manna, Vice-Presi- ing gains after re-rating of 7-15 per cent following the merger of HDFC Life
dent (Products) at HDFC Life, said and Max Life.
Pragati will help customers reap the Also, ICICI Prudential Life is marginally above the upper end of its IPO price. In
dual benefits without significantly fact, State Bank of India, too, didn't react much to its recent stake sale which
denting their monthly income. Promi- placed it (Rs 46,000-crore valuation) a notch above ICICI Prudential Life in the
nent features include premiums start- pecking order. All this indicates that the market has probably lost interest in
ing at Rs 100 a month, auto cover
life insurance-oriented stocks.
continuance wherein full death ben-
efit is payable for up to two years As R Sreesankar, head, institutional equities, Prabhudas Lilladher, puts it, "Till
after last unpaid premium, flexible the time HDFC Life-Max Life deal happened, we didn't have any valuation bench-
premium and hassle-free issuance mark in the life insurance sector. But from here on, we need to monitor how
based on 'declaration of good health'. the sector grows and growth may not be secular across companies."
The Insurance Times, March 2017 11

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