HDFC Life: Tad ahead of the rest

Life insurance companies have posted disappointing numbers for February. Life Insurance Corp. of India Ltd (LIC) is the biggest drag. It still accounts for nearly one-third of the industry's total annual premium equivalent (APE) based on FY25 data till date, so any significant drop in its performance has a big impact on total industry data.

- Manish Joshi

When LIC's APE fell by 23% year-on-year (y-o-y) in February, it led to a 6% drop in the metric for the industry. The policies sold was down 32% y-o-y to 1.84 million in the individual segment, but a big 24% y-o-y increase in average ticket size mitigated the impact on overall value.

The life insurance industry seems to have become an unexpected casualty of the equity market meltdown. This has likely affected unit-linked insurance plan (Ulip) sales. Note that companies do not share product-wise monthly premium details, but Ulip could be the likely culprit behind the weak numbers.

While February 2024 was a good month with 25% industry growth, the high base alone cannot be the reason for the drop this time.