Page 18 - Insurance Times February 2024

Tribunal (ITAT) had directed the tax Private Life Insuers are expected to report a modest
department to reconsider the issue of
interim bonus and the department has growth in Q3
disallowed the same. The tax effect of Private life insurers are set to report a modest growth in annualised premium
the same is around Rs 2133 crore. equivalent (APE), a proxy for revenue in insurance, due to changes in taxation
and a decline in group fund-based business in the December quarter.
Pvt life insurers paid more The share of Unit-Linked Insurance Plans (ULIPs) is likely to rise, in lockstep
benefits than LIC in 2023 with the surge in stock indices, slowing the growth in Value of New Business
(VNB) margins.
The total benefits paid by private life
insurance companies to policyholders General insurers are expected to report small premium growth, with listed
rose by 5.98 per cent to Rs 1.57 trillion ICICI General Insurance improving its combined ratio and net profit.
during the financial year ended March Listed private life insurers' VNB margins are likely to show some contraction
31, 2023 (FY23). This figure stood at on a year-on-year basis due to a reduced share of nonparticipating products
Rs 1.49 trillion in the corresponding in the product mix and movement in interest rates.
year-ago period.
On the other hand, Life Insurance industry during the period gell to 98.54 premium equivalent) growth and VNB
Corporation of India (LIC) paid out 4 per cent from 98.64 per cent last year. margins," said analysts at Emkay
per cent fewer benefits at Rs 3.39 Global Financial Services.
trillion from Rs 3.53 trillion in FY22. Insurers may see compr- Analysts at Emkay Global estimate ICICI
The total benefits paid by the ession in third quarter Prudential Life's VNB margin is
insurance companies dropped to Rs projected to slip to 28.8 per cent from
4.96 trillion during FY23 from Rs 5.02 profit margin 33.9 per cent, Max Life Insurance's to
trillion in the corresponding year-ago The life insurance industry is expected 29.7 per cent from 39.3 per cent, and
period. The total benefits paid in the to report a compression in its margin HDFC Life's to 26.6 per cent from 26.8
period under consideration constitutes during the third quarter of 2023-24 per cent.
64 per cent of the net premium. (Q3FY24), showing a decline in the However, Life Insurance Corporation's
share of non-participatory (non-par)
As of March 2023, LIC dominated the (LIC's) margin is likely to go up to 15.5
products and movements in interest per cent from 14.6 per cent in the year-
market with 62.58 per cent share and
rates. Meanwhile, the combined ratio ago period due to an increase in their
the private insurers accounted for the
remaining 37.42 per cent of the life of non-life insurers is expected to feel share of non-par products. Similarly, SBI
insurance industry. the pressure of rising catastrophic Life Insurance's margin is expected to
events and surge in medical issues. The be 28.4 per cent from 27.8 per cent.
According to the latest data released reduction in the share of non- The premium of non-life insurers is
by the Insurance Regulatory and participating products among life expected to report decent growth,
Development Authority of India insurers is one of the major reasons for backed by improvement in the health
(IRDAI), the total benefits paid by the the contraction in the value of new and motor segments. In the segment,
industry moderated on the back of business (VNB) margins of the the management's commentary on the
falling death claims and maturity. companies. The VNB is a measure of insurance regulator's proposal to
The death claims paid during the the profits expected from new increase surrender value and the noise
period declined by nearly 32 per cent businesses. The VNB margin is the around the mis-selling of products will
to Rs 41,457.3 crore from Rs 60,821.8 profit margin of the companies. be closely watched.
crore in FY22. Similarly, maturity "Listed private life insurers' VNB In the general insurance business, gross
payments fell by 11.1 per cent to Rs margins are likely to witness some written premiums (GWP) of general
2.13 trillion from Rs 2.4 trillion. contraction on YoY basis due to insurers are expected to report double-
In case of individual life insurance reduced share of Non-Par in the digit growth, led by a robust
business, out of the total 1.076 million product mix and movement in interest improvement in those of the retail
death claims, the companies paid 1.06 rates. Overall, we expect performance health and the motor segments. "We
million claims worth Rs 28,611 crore. of life insurers to be low-key against the expect strong growth in the motor
The claim settlement ratio of the backdrop of moderating APE (annual segment, driven by a revival in motor

The Insurance Times February 2024 17