Page 16 - The Insurance Times August 2022

HDFC Life first quarter net Solvency ratio of the insurer stood at low-base effects in quarter 1 (Q1) due
178 per cent in Q1FY23, slightly above to the Covid-19 first and second wave
up 21% on premium
the regulatory requirement of 150 per effect. The financial year 2022-23
income cent. It is the ratio of available solvency (Q1FY23) is likely to see growth given
HDFC Life's net profit surged 21 per margin to required solvency margin. the base effect. Based on the IRDA
cent year-on-year (YoY) to Rs 365 crore data, SBI Life has had a standout
in the April-June quarter of FY23, aided Life insurers' new biz hit as quarter but other insurers have done
by lower mortality reserves and reasonably well.
LIC premiums contract
healthy jump in value of new business
The low base was balanced off by an
(VNB). In the year-ago period, it had Life insurance companies witnessed a
adverse environment with high
reported a net profit of Rs 302 crore. modest increase of 4.15 per cent in
inflation, elevated interest rates and
their collective new business premium
Its VNB rose 25 per cent to Rs 510 volatile equity markets. While April and
at Rs 31,254.55 crore in June, data
crore in Q1FY23, over the same period May benefitted from strong base
from IRDAI showed. The 24 life
a year ago, while annualised premium effects, there was moderation in June
insurance companies had collected
equivalent (APE) grew 22 per cent to
premiums worth Rs 30,009.48 crore in 2022. Overall, ticket sizes declined 8
Rs 1,904 crore.
same month a year ago. per cent year-on-year (YoY).
VNB is the present value of future
LICwitnessed a decline of 5.29 per cent For FY23, total RWRP (retail weighted
earnings from policies issued during a
in the new business premium in June received premium) is estimated to see
period. It reflects the additional
2022 at Rs 20,643.67 crore, as against a growth of 12-13 per cent YoY, with
earnings expected to be generated
Rs 21,796.28 crore in the year-ago the private sector growing in the mid-
through the new policies issued. APE is
month, according to the IRDAI data. to high-teens and newly-listed Life
the sum of the total value of regular-
Insurance Corporation (LIC) growing in
or recurring-premiums plus 10 per cent The rest of the 23 private sector
the high-single digits. Listed private
of any new single premiums written for players on the other hand registered
the fiscal year. a growth of 29.19 per cent in their companies could see at least 20 per
cent YoY growth in Value of New
VNB margins, a measure of combined new premium at Rs
Business (VNB) in Q1FY23. SBI Life will
profitability of life insurance 10,610.89 crore, compared with Rs
probably have far higher VNB growth
companies, of the insurer stood at 26.8 8,213.20 crore in June 2021.
rates - maybe close to 90 per cent.
per cent in Q1FY23, up 60 basis points
from the year-ago period. In FY22, its Life insurers to once again Due to product diversification, better
margins were 27.4 per cent. distribution mix and better cost
benefit from a low-base
Total premium of the insurer, which efficiencies, listed private players
effect should be able to keep relatively higher
includes new business premium as well
as renewal premium, grew 23 per cent For two consecutive fiscals, life margins. The growth would be driven
YoY to Rs 9,396 crore in Q1FY23. insurance companies have experienced by demand for the annuity/non-
16 The Insurance Times, August 2022