Sector Update | 10
| Financials
June 2020
Sector Update
India Life Insurance
Technology
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COVID-19 weighs on performance – Pvt. players’ individual WRP
down ~32% YoY for May’20 (-36% for FY21YTD)
LIC’s individual WRP dips ~3% YoY (-23% for FY21YTD), resulting in 20% YoY
drop (-30% for FY21YTD) in overall industry
I
nsurance
T
racker
Private players’ individual weighted received premium (WRP) declined 32.1% in
May’20 (v/s -40.3% YoY in Apr’20) while industry posted decline of 19.8% YoY (v/s -
43.7% YoY in Apr’20). The decline was mainly due to the COVID-19 outbreak, which
continues to weigh down business performance. For FY21YTD, private players’
individual WRP plunged 35.5% YoY; for the industry, it dropped 30% YoY.
Amongst the listed players, Max Life witnessed the lowest decline of 20% YoY while
HDCF Life saw a decline of 33% YoY. SBI Life/IPRU Life reported decline of 46%/52%
YoY.
Amongst mid-sized players, Bajaj Allianz witnessed decline of 18% YoY while Birla Sun
Life/Tata AIA saw growth of 10%/3% YoY.
LIC reported much lower decline of 3.1% YoY (v/s -47.9% YoY in Apr’20) in individual
WRP. During FY21YTD, LIC’s individual WRP declined 23.0% YoY.
Private players’ individual WRP market share contracts to ~49% for May’20
(52% as on FY21YTD)
Private players’ individual WRP market share contracted ~910bp to ~49% in May’20
vs 58% in Apr’20 as LIC posted much lesser decline of 3.1% YoY as against 19.8% YoY
decline by the industry whereas private players reported higher decline of 32.1%.
During FY21YTD, HDFC Life (9.5%) remained the largest private insurer in terms of
individual WRP, followed by SBI Life (7.7%) and IPRU life (6.5%). On an un-weighted
basis, SBI Life was the largest private insurer with market share of 7.6%, followed by
HDFC Life (6.4%) and IPRU Life (4.6%).
Individual WRP and YoY growth (%)
Individual
WRP, INRm
Grand Total
Total Public
May-20
34,778
17,810
YoY
growth
-19.8%
-3.1%
Performance of key private players
The combined market share of listed players – SBI Life, ICICI Prudential Life, HDFC
Life and Max Life– on an individual WRP basis stood at ~56.8% as at May’20 (v/s
Total Private
16,968 -32.1%
62.9% in FY20). Tata AIA, Bajaj Allianz and Birla Sun Life are getting firmly positioned
HDFC Life
3,096
-33.2%
amongst the 5-7th largest private insurers on individual WRP. Amongst the key
SBI Life
3,023
-45.9%
listed players, on the basis of individual WRP –
ICICI Prudential
1,915
-52.4%
HDFC Life
reported 33% YoY decline (-32% YoY in FY21YTD); total un-weighted
Max Life
1,606
-19.5%
premium declined ~47% YoY (-50.2% YoY in FY21YTD).
Tata AIA
1,583
3.3%
SBI Life
reported decline of 46% YoY (-57% YoY in FY21YTD); total un-weighted
Birla Sun life
982
10.3%
premiums declined 31.3% YoY (-15.5% YoY in FY21YTD).
Bajaj Allianz
966
-18.0%
IPRU Life
reported decline of 52% YoY (-54% YoY in FY21YTD); total un-weighted
Kotak Life
753
4.9%
premium declined 2.3% YoY (-29.6% YoY in FY21YTD).
PNB Met Life
595
-30.3%
Max Life
reported 20% YoY decline (-20% YoY in FY21YTD); total un-weighted
Reliance Life
501
-6.7%
premium declined 18.3% YoY (-16.8% YoY in FY21YTD).
Source: Company, MOFSL
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542 |Himanshu
Taluja
(Himanshu.Taluja@motilaloswal.com); +91 22 6129 1544
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526 |
Yash Agarwal
(Yash.Agarwal@motilaloswal.com); +91 22 6129 1571
Investors are advised to refer through important disclosures made at the last page of the Research Report.
10 June 2020
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Sector Update | Financials
Divergent trends in sum assured – reflects improving business mix
According to our observation, while premium growth has been under pressure for
most insurers, growth in the sum assured, however, is witnessing divergent trends.
For private insurers, while the total un-weighted individual single/non-single
premium has declined 14.5%/32.6% YoY in May’20, the individual sum assured
has, on the contrary, grown 24.4%/12.2% YoY.
For the total industry, sum assured
declined 7.9%/2.8% YoY in May’20 as against the decline of 17.9%/19.9% in total un-
weighted individual single/non-single premium. This was largely due to LIC, which
reported a much higher decline of 44.9%/45.9% in sum assured as against a decline
of 19.6%/1.8% YoY in total un-weighted individual single/non-single premium. Thus,
this re-iterates the fact that private insurers have been focusing on the protection
business, which has a higher sum assured in proportion to the premium. On the
other hand, ULIPs have been facing pressure due to volatile capital markets, which
generally has a higher average ticket size.
Amongst listed players –
HDFC Life
reported much lower decline of 3.9% in sum assured as against
decline of 32.5% in total unwtd individual non-single premium.
IPRU Life
too reported lower decline of 30.9% in sum assured as against decline
of 53.2% in total unwtd individual non-single premium.
SBI Life,
however, reported higher decline of 56.7% in sum assured as against
decline of 46.5% in total unwtd individual non-single premium.
Max Life,
on the contrary, reported growth of 35.8% in sum assured as against
decline of 20.8% in total unwtd individual non-single premium.
Mid-sized players like
Tata AIA, Bajaj Allianz and Kotak Life
reported growth in
sum assured as against decline in total unwtd individual non-single premium.
Exhibit 1:
Un-weighted new business premium and growth – sorted on May’20 basis
INR m
Grand Total
Total Public
Total Private
ICICI Prudential
SBI Life
HDFC life
Canara HSBC OBC
Max Life
Tata AIA
Bajaj Allianz
Kotak Life
Birla Sun Life
May-20
137,390
102,115
35,275
6,787
6,385
6,376
2,368
2,336
2,218
1,756
1,578
1,507
YoY
growth
-25.4%
-24.3%
-28.3%
-2.3%
-31.3%
-46.9%
279.4%
-18.3%
13.0%
-46.2%
-51.6%
-15.7%
FY21YTD
204,667
137,932
66,736
9,349
15,559
13,065
2,639
4,054
3,762
4,897
2,791
4,124
YoY
growth
-27.9%
-26.5%
-30.7%
-29.6%
-15.5%
-50.2%
7.2%
-16.8%
18.1%
-10.2%
-56.8%
38.6%
FY20
2,588,966
1,779,771
809,196
123,482
165,918
173,963
15,275
55,836
32,411
51,787
51,058
36,571
YoY
Growth
20.6%
25.2%
11.5%
20.4%
20.3%
16.2%
4.6%
8.2%
30.9%
5.2%
28.4%
-6.6%
Source: Company, MOFSL
10 June 2020
2
 Motilal Oswal Financial Services
Sector Update | Financials
Exhibit 2:
Individual WRP, growth and market share – sorted on May’20 basis
INR m
Grand Total
Total Public
Total Private
HDFC Life
SBI Life
ICICI Prudential
Max Life
Tata AIA
Birla Sun life
Bajaj Allianz
Kotak Life
PNB Met Life
May-20
34,778
17,810
16,968
3,096
3,023
1,915
1,606
1,583
982
966
753
595
YoY
growth
-19.8%
-3.1%
-32.1%
-33.2%
-45.9%
-52.4%
-19.5%
3.3%
10.3%
-18.0%
4.9%
-30.3%
Mkt
share
100.0%
51.2%
48.8%
8.9%
8.7%
5.5%
4.6%
4.6%
2.8%
2.8%
2.2%
1.7%
FY21YTD
52,970
25,465
27,505
5,008
4,074
3,468
2,666
2,933
1,483
1,693
1,200
945
YoY
growth
-30.0%
-23.0%
-35.5%
-31.5%
-57.0%
-53.7%
-19.5%
16.5%
-4.5%
-11.0%
-4.1%
-31.5%
Mkt
share
100.0%
48.1%
51.9%
9.5%
7.7%
6.5%
5.0%
5.5%
2.8%
3.2%
2.3%
1.8%
FY20
734,885
314,572
420,314
59,646
97,711
66,427
40,785
26,918
17,018
19,268
16,454
12,964
YoY
growth
6.2%
8.3%
4.8%
19.0%
9.1%
-6.4%
5.2%
20.6%
0.5%
10.6%
-1.3%
-5.5%
Mkt
share
100.0%
42.8%
57.2%
8.1%
13.3%
9.0%
5.5%
3.7%
2.3%
2.6%
2.2%
1.8%
Source: Company, MOFSL
Exhibit 3:
Market share among private players on un-weighted and individual WRP — sorted on individual WRP FY21YTD
Un weighted Premiums
(%)
Grand Total
Total Private
HDFC Life
SBI Life
ICICI Prudential
Tata AIA
Max Life
Bajaj Allianz
Birla Sun life
Kotak Life
PNB Met Life
Reliance Life
May-20
137,390
35,275
18.1%
18.1%
19.2%
6.3%
6.6%
5.0%
4.3%
4.5%
2.0%
1.6%
FY21YTD
204,667
66,736
19.6%
23.3%
14.0%
5.6%
6.1%
7.3%
6.2%
4.2%
1.7%
1.3%
FY20
2,588,966
809,196
21.5%
20.5%
15.3%
4.0%
6.9%
6.4%
4.5%
6.3%
2.2%
1.2%
May-20
34,778
16,968
18.2%
17.8%
11.3%
9.3%
9.5%
5.7%
5.8%
4.4%
3.5%
3.0%
Individual WRP
FY21YTD
FY20
52,970
734,885
27,505
420,314
18.2%
14.2%
14.8%
23.2%
12.6%
15.8%
10.7%
6.4%
9.7%
9.7%
6.2%
4.6%
5.4%
4.0%
4.4%
3.9%
3.4%
3.1%
3.0%
2.1%
Source: Company, MOFSL
Exhibit 4:
Individual single premium and sum assured — sorted on individual single premium May’20 basis
Individual Single Premium
(%)
Grand Total
Total Public
Total Private
HDFC Life
SBI Life
Max life
ICICI Prudential
Tata AIA
Kotak Life
Birla Sun life
Bajaj Allianz
PNB Met Life
May-20
17,100
11,267
5,833
1,622
895
720
710
627
374
85
56
6
YoY
growth
-17.9%
-19.6%
-14.5%
-43.7%
-15.2%
19.0%
-17.3%
56.2%
13.0%
-9.1%
-2.7%
-50.4%
FY21YTD
23,488
14,584
8,904
2,548
1,243
1,315
1,217
786
560
112
45
8
YoY
growth
-35.2%
-41.8%
-20.5%
-44.9%
-16.1%
21.4%
-25.5%
33.9%
-4.9%
-47.6%
-54.5%
-59.6%
May-20
17,933
5,004
12,930
743
786
1,626
1,429
4,948
2,295
124
86
0
Individual Single Sum Assured
YoY
growth
-7.9%
-44.9%
24.4%
-39.9%
-27.5%
10.9%
-38.7%
1108.6%
-13.1%
-51.0%
122.2%
-97.1%
FY21YTD
YoY
growth
24,934
-25.7%
6,303
-58.5%
18,631
1.3%
1,203
-35.6%
1,040
-36.1%
2,827
5.6%
2,471
-40.5%
5,752
822.3%
3,820
-22.8%
159
-64.5%
113
-1.3%
(0)
-101.8%
Source: Company, MOFSL
10 June 2020
3
 Motilal Oswal Financial Services
Sector Update | Financials
Exhibit 5:
Individual non-single premium and sum assured — sorted on individual non-single premium May’20 basis
(%)
Grand Total
Total Public
Total Private
HDFC Life
SBI Life
ICICI Prudential
Max Life
Tata AIA
Birla Sun life
Bajaj Allianz
Kotak Life
PNB Met Life
May-20
33,068
16,683
16,385
2,934
2,933
1,844
1,534
1,521
974
960
715
595
Individual Non-Single Premium
YoY
YoY
FY21YTD
growth
growth
-19.9%
50,621
-29.8%
-1.8%
24,007
-21.5%
-32.6%
26,614
-35.9%
-32.5%
4,753
-30.6%
-46.5%
3,950
-57.7%
-53.2%
3,346
-54.3%
-20.8%
2,534
-20.9%
1.9%
2,854
16.1%
10.5%
1,472
-3.9%
-18.1%
1,689
-10.8%
4.5%
1,144
-4.1%
-30.2%
945
-31.4%
Individual Non -Single Sum Assured
YoY
YoY
May-20
FY21YTD
growth
growth
1,167,693
-2.8%
2,046,731
-3.2%
168,068
-45.9%
215,282
-61.8%
999,625
12.2%
1,831,449
18.1%
158,023
-3.9%
298,711
10.3%
40,535
-56.7%
54,630
-65.8%
138,307
-30.9%
277,950
-24.5%
164,036
35.8%
273,576
25.5%
154,741
37.5%
384,179
102.6%
29,561
-6.8%
47,214
-13.2%
81,448
359.3%
111,005
261.3%
54,743
102.1%
81,533
69.5%
61,833
168.1%
128,368
235.9%
Source: Company, MOFSL
10 June 2020
4
 Motilal Oswal Financial Services
Sector Update | Financials
NOTES
10 June 2020
5
 Motilal Oswal Financial Services
Sector Update | Financials
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In
case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30 days take appropriate measures to make the recommendation
consistent with the investment rating legend.
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document. This should, however, not be treated as endorsement of the views expressed in the report. MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients
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transactions. Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for
other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures. Above disclosures include beneficial holdings lying in demat account of MOFSL which are
opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income
from clients which are not considered in above disclosures.
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as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in
Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
"accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must
immediately discontinue any use of this Report and inform MOCMSPL.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or
reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report
may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by
any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and
should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained
in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without
any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect or
have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any
company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that
is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you
solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or licensing requirement
within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such
restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use
of the information. The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees
responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website www.motilaloswal.com.
CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance
Corporate Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance
Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group
company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in
securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Bench.
10 June 2020
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