Life insurance industry saw its annualised premium equivalent (APE) at 7% year-on-year for the first six months of the current financial year. While private players witnessed higher growth at 13%, Life Insurance Corporation of India (LIC) saw a growth at just 3% (year-on-year) at Rs 16,296 crore in the period April-September, suggests the data from Kotak Institutional Equities.

Participants in the insurance industry say LIC is facing challenges in the group insurance segments in the current financial year.

The data from Insurance Regulatory and Development Authority of India (Irdai) shows that, in the current financial year till September, LIC received first year premiums of Rs 63,480.68 crore as against Rs 68,224.29 crore in previous financial year a negative growth of around 7%. The decline in premium is higher in the group insurance business for LIC.

Even in the month of September, LIC saw its APE at 5% largely due to the fall in group insurance business. On the other hand, insurance industry witnessed APE at 7% and private players at 18% for the month of September.

APE is the sum of annualised first year premiums on regular premium policies, and 10% of single premiums, written by insurance companies during any period from both retail and group policyholders.

"Private sector individual APE continued to rise upwards, increasing 18% y-o-y in September 2018. While HDFC Life recovered to 20% y-o-y post a few months of sluggish performance, ICICI Life was flat y-o-y. SBI Life picked up as well with 23% y-o-y growth while Max remained strong at 30% y-o-y. With shifting focus to protection and other high-margin policies, VNB growth of large players will remain strong and in that sense APE growth trends are less relevant," says the report by Kotak Institutional Equities.

Players like Birla Sun Life Insurance, Bharti AXA, Future Generali and India First continued to see its APE growth in positive in the current financial year. "Birla SL reported 70% growth in individual APE in September 2018, increasing market share to 2.3% from 1.5% in September 2017. This is likely driven by making strong inroads in HDFC Bank. 59% y-o-y rise in ticket size in the individual non-single segment during September 2018 (up 19% in 1HFY19) suggests that a large part of the growth may be from higher-ticket ULIPs," says the report by Kotak Institutional Equities.

The data from Irdai also shows that first year premiums in the current fiscal of life insurance companies surged by 1.1% at Rs 93,079.03 crore as against Rs 92,065.36 crore in the corresponding period last fiscal.

Officials in the industry say that, in the past few months, growth has been coming from individual non-single premiums and with volatile equity markets and people will stay away from single premiums plans.