According to the latest report released bythe Insurance Regulatory and Development Authority, the first yearpremium collection of the life insurance companies grew by a whopping 177% year on year (yoy) from Rs6,524 crore to Rs18,096 crore for theperiod April-July 2006.
In the private sector, ICICI Prudential LifeInsurance (IPLI) as well as Bajaj Allianz Life Insurance (BALI)continued to be the growth leaders with a 206% and a 149% year-on-yeargrowth respectively.
We estimate the value of IPLI to be Rs66 pershare of ICICI Bank and that of BALI at Rs700 per share of Bajaj Auto.We believe that as the robust growth in the sector continues on theback of the changing demographics and investment patterns of the Indianpeople, the insurance joint ventures of these companies would keepcreating higher value for their shareholders.
Premium collections show robust growth
During July 2006, the private life insurancecompanies saw a growth of 161% yoy in the first premium collection toRs4,068 crore. Public sector insurer Life Insurance Corporation's (LIC)first premium collection increased by a mammoth 182% yoy to Rs14,027crore during the same period. The launch of a new single premiumproduct called "Jeevan Tarang" (which is eligible for tax deductions)helped LIC to achieve this commendable growth.
In the private sector, IPLI witnessed thehighest first premium collection of Rs1,157 crore, achieving a growthof 149% over the same period last year. It was followed by BALI whosefirst premium collection grew by 206% yoy to Rs833 crore.
Private players continue the robust show
Source: IRDA, Sharekhan research
IPLI takes lead in private sector
Over the last couple of years, IPLI and BALIhave contested a tough fight to maintain their market leadershipamongst the private players. In the current year up to July, IPLI hasmaintained its market leadership with a share of 28.5% followed by BALIwith a 21% market share. Both the companies recorded a significantgrowth in their premium collections driven by a larger number ofpolicies and higher ticket size.
Market shares in YTD first year premium collection (%)
Source: IRDA, Sharekhan research