SUBSCRIBE NEWSLETTER
  • Change Language
  • English
  • Hindi
  • Marathi
  • Gujarati
  • Punjabi
  • Tamil
  • Telugu
  • Bengali
  • Insurance Life insurers profit declines marginally in FY 2015-16

    Life insurers profit declines marginally in FY 2015-16

    Life insurance industry has recorded net profit of Rs.7,375 crore in FY 2015-16 as against Rs. 7,527 crore in FY 2014-15, a decline of 2%.
    Team Cafemutual Jul 25, 2016

    The 24 life insurers have witnessed a 2% decline in their Profit after Tax (PAT) in FY15-16. The combined net profit of these insurance companies stood at Rs. 7,375 crore in FY 2015-16 as against Rs. 7,527 crore in the corresponding period last year.

    The decline in profitability was primarily due to muted sales of traditional policies & pension products and lower persistency ratio of a few large and mid and small sized life insurers, said experts.

    Among top ten players in terms of their AAUM, Reliance Nippon Life, Birla Sun Life and Tata AIA witnessed a decline in profitability. Birla Sun Life’s profit declined from Rs. 285 crore in FY 2014-15 to Rs. 140 crore in FY 2015-16. Tata AIA Life’s PAT too declined from Rs. 264 crore to Rs. 64 crore during the same period. Reliance Life recorded a net loss of Rs. 246 crore in FY15-16, as against a net profit of Rs. 135 crore in FY14-15.

    Among mid and small life insurers, in terms of their AAUM, nine life insurers saw a decrease in their profitability. Life insurers like Edelweiss Tokio, Future Generali, Aviva Life, Aegon Life, Bharati Axa, Shriram, Sahara and IDBI Federal witnessed a steep decline in their profitability.

    Meanwhile, state owned LIC has overtaken ICICI Prudential once again and emerged as the most profitable life insurer for the third consecutive year. LIC’s net profit increased from Rs. 1,824 crore in FY14-15 to Rs. 2,518 crore in FY 2015-16, clocking a 38% growth. A Mumbai based financial adviser attributes this growth to strong agency penetration and good track record of LIC. According to him, LIC has opened some new branches in small cities which helped the insurer collect good premiums from these areas.

    Barring LIC and Kotak Mahindra Life, no private insurer among the top ten witnessed double digit growth in profits. Kotak posted a growth of 10% PAT at Rs. 251 crore as against Rs. 229 crore PAT in its preceding year.

    ICICI Prudential’s PAT for FY 2015-16 stood at Rs. 1,650 crore, a marginal increase of 1% from the previous year at Rs. 1,634 crore. ICICI Prudential Life had the distinction of being the most profitable insurer in FY 2011-12 and FY 2012-13.

    Typically, profitability is a function of underwriting efficiencies and building good renewals. Higher persistency and more efficient underwriting can lead to higher profitability.

    Profits of life insurance companies in FY 2015-16

    Life insurer

    PAT 2016

    PAT 2015

    Change in %

    LIC

    2518

    1824

    38%

    ICICI Prudential

    1650

    1634

    1%

    Bajaj Allianz

    879

    876

    0%

    SBI Life

    861

    820

    5%

    Birla Sun Life

    140

    285

    -51%

    HDFC Standard

    818

    786

    4%

    Max Life

    439

    414

    6%

    Reliance

    -197

    135

    -246%

    Tata AIA

    64

    264

    -76%

    Kotak

    251

    229

    10%

    Bharati Axa

    -111

    -121

    8%

    Aegon Life

    -104

    -51

    -104%

    Aviva Life

    9

    50

    -82%

    PNB MetLife

    54

    52

    4%

    IDBI Federal

    15

    155

    -90%

    Future Generali

    -36

    1

    -3700%

    India First

    8

    7

    14%

    Canara HSBC OBC

    126

    103

    22%

    DHFL Pramerica

    51

    40

    28%

    Exide

    89

    66

    35%

    Edelweiss Tokio

    -155

    -71

    -118%

    Star Union Diachi

    23

    13

    77%

    Sahara (June)

    -2

    3

    -167%

    Shriram(December)

    -15

    13

    -215%

    Total

    7375

    7527

    -2%

     

     

    Source: Company websites

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

    Click to clap
    Disclaimer: Cafemutual is an industry platform of mutual fund professionals. Our visitors are requested to maintain the decorum of the platform when expressing their thoughts and commenting on articles. Viewers are advised to refrain from making defamatory allegations against individuals. Those making abusive language or defamatory allegations will be blocked from accessing the web site.
    3 Comments
    Suryaprakash · 7 years ago `
    But agents no downfall
    carly · 7 years ago `
    Helpful comments ! I was enlightened by the insight , Does anyone know where my assistant could get ahold of a fillable CT JD-CV-128 document to fill out ?
    George · 7 years ago
    Hello carly. my business partner completed a template a form copy with this link http://goo.gl/cYyFoD
    Reply
    Login or Sign up to post comments.
    More than 2,07,000 of your industry peers are staying on top of their game by receiving daily tips, ideas and articles on growth strategies. Join them and stay updated by subscribing to Cafemutual newsletters.

    Fill in the below details or write to newsdesk@cafemutual.com and subscribe to Cafemutual Newsletter now.