ValuePickr Forum

Life Insurance Companies - Comparison

Thanks for the reply… Certainly the data compares the three firms nicely.

Can you just let me know to which period this data belongs ? And source…

Data is as of Q2FY18-19. I got the data from Tijori whose sources in turn point to IRDA.

Thanks again…

I went through the link. Some data are upto Oct 2018 and some till March 2018.

However, what interested me is in comparison -->

  1. ABSL tied up with HDFC bank and bancassurance share gone beyond 50% in its new business. For Max, axis constitutes 50%.
  2. As the HDFC tie up became effective post 2018, its contribution to revenue is being reflected this year whereas contribution to profitability might reflect down the time.
  3. Because of the tie up, ABSL premium income is growing strongly on a relatively large base, same has not happened with BALIC/ MAX. (almost 50% compared to 10 - 20% for rest two)

Thanks for the reply again.

Disc: Invested in ABCL/ Looking to add HDFC life

I think it’s because some metrics like.embedded value are updated only in annual report of companies ( but I’m not sure ). You can check with those guys cause they have a thread on value picker.

A very Good analysis on Life Insurance sector by Nirmal Bang

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We need to do this analysis for the year once, SBI life declares result. From HDFC Life fy19 presentation they have changed persistence and mortality assumptions.

I hope @Anant could take out some time and have a look at this.


I haven’t listened to any of the conf calls of life insurance companies yet. Was going through the results at a little bit relaxed pace & following are some observations -

FY19 EV FY18 EV YoY Growth FY19 VNB FY18 VNB YoY Growth FY19 VNB Margin EVOP Unwind/Starting EV VNB/Starting EV
HDFC Life 18301 15216 20% 1537 1282 20% 24.60% 20.1% 8.5% 10.1%
ICICI Life 21623 18788 15% 1328 1286 3% 17.00% 20.2% 8.4% 7.1%
SBI Life 23730 20170 18% 1920 1570 22% 19.80% 17.4% 8.0% 9.5%
FY19 Total Premium Growth FY19 New Business Premium Growth FY19 Renewal premium Growth
HDFC Life 24% 32% 16%
ICICI Life 14% 15%
SBI Life 31% 26% 33%

The most interesting thing to note is lower growth in EV for HDFC life compared to total premium growth & lower growth in VNB compared to strong NBP growth. I was hoping at least the VNB growth would be much higher than the other two companies given the NBP growth. I think breakup of suplus statement might have some clue.


  • There is no surplus to report in Non-Par annuity business although premium has grown by 143%. It looks like business has not reached minimum scale to pay for operating expenses etc. & hopefully things would improve going further.
  • It was surprising to see deficit in ULIP portfolio despite reaching the scale of almost 10,000Cr
  • Also growth of surplus in Non Par Life is much lower than premium growth. May be there are costs involved in the new tie-ups in credit life side & this number shall improve as each partnership reaches minimum scale.

It was good to see 15% growth in EV (19% growth pre-dividend) for ICICI Life considering the subdued premium growth year they have had. This a little bit like growth in book value for banks. But ~400Cr of the EV has come from changes in operating assumptions. It would be good to understand these from management in conf call.
Another positive thing was increase in ad spends by whopping ~500Cr by ICICI Life. I consider this as good spend although I personally never came across ad of ICICI Life compared to HDFC Life or SBI Life.


  • The surplus of Non par life business went from +205Cr to -263Cr. I think a large part of this might be due to ad spends. Another way I feel about this is - Non par life business of ICICI Life does not generate enough to fund the growth in newer products or partners like HDFC Life.
  • The ULIP surplus number is good to see & still little bit surprised by loss in ULIP by HDFC Life.

For SBI Life, the growth in VNB tracks well with growth in NBP.


  • Even SBI Life makes pretty decent surplus from ULIPs
  • Surplus for Par Life has gone down for ICICI/SBI Life whereas it has gone up for HDFC Life. It would be interesting to figure out if this is due to additional expenses by former two or is it case margin compression etc.

Disc - I hold HDFC Life & ICICI Life. No transactions in last 60 days.


Hi… We are new to Insurance. Can you please help us understand what is Unwind/Starting EV ?

Unwinding means taking the business one year forward in case of assumptions.

e.g. Let’s say to cover someone for 3 years for sum of 1,00,000 Rs. with a one time premium.
Assuming a reference rate (prevailing G-sec yield etc.) of 10%, the premium today comes to 75,131 by reverse discounting.
But to mitigate risk, you only assume reference rate to be 5% while determining premium. This way premium come to 86,383.

Now when you unwind position after 1 year, following happens ->
You got premium paid of 86,383. The reference rate is 10%, so sum becomes 94,933.
The liability at 5% for next 2 years comes to 90,702.
The difference between the two is your unwind at reference rate = 94933 - 90702 = 4231.

If reference rate moves to 12%, you make unwind which will be more than reference rate.
Hence you will see two parts of unwind in reports - 1) at reference rates 2) at rate in addition to reference rates.

The unwind in the books of life insurance companies is a complicated version of above example.

Here is the presentation we did on life insurance industry last year ->

Hope this helps.


The presentations are extremely useful. Thanks a lot for sharing.

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Will they ask LIC to list as well?

LIC seems to be holding onto its ground in terms of market share. Any explanation why ?

Source -

Disc: Invested in HDFC Life

Because of miss selling of ulips by private players people have got very skeptical and Jane shifted to fixed income products with trusted brand names like LIC

Came across this interesting argument against investing in Life Insurance sector by Sridhar from Enam.

" If I look at life insurance versus general insurance, their persistency ratio for 61 month is 50% which means half your customers are not paying your premiums after five years. You typically end up making money only after five years because of the way insurance is structured. Half of them are not paying.

The number two is that the penetration of life insurance adjusted for per capita keep in mind that these are actually financial products. You cannot say we are 2.5-3% penetration and China is also 3%. Their per capita is four times larger than us.

From a penetration standpoint also, this is one of the only product where India is over penetrated forex per capita. And my last point on life insurance is that there are roughly 300 million life insurance policies outstanding in the market as we speak, the total number of households are roughly 300 million and if you assume only half of them are insurable you are already talking of of two life insurance policies per household. Whichever way I cut it, it looks over penetrated to me."


I read this, points are really sensational and like with all sensational things, if we think deeper each point, we would know that they are not that powerful as looks in first read…simple things, after 5 years if say someone is not putting money in policy, i would dig deeper was it market linked or pure protection before concluding anything…also no one knows what did the customer do with that money…did he switch to competetor or changed his type of policy or upgraded to better policy or simply the same person decided one fine that that he doesn’t need insurance anymore. Was it a corporate policy and he switched job etc etc etc…before concluding and commenting on future giants of India. I believe insurance and pension are basic amenities which with time would turn more basic needs of humans…regarding the sensational number metrics on penetration…well very well presented thought …infact I even know ppl who have 3 policies…so see one person has 3 policies sold to him by his 3 agent uncle’s so this is pinnacle of over penetration…but the same person when enlightened would sell all 3 and buy just 1 better and correct policy when he understands what insurance actually means and which company is worthy of his money…

This is view of Shridhar Shivaram of Enam

Now considered explanation of Ashish Vohra of Reliance Nippon Life

“There are various ways to measure penetration. I would argue that at an average level, the total sum assured that a customer carries today is less than one year’s total income and I would argue that it is not sufficient penetration. The total amount of protection that a customer carries in a Western world is probably 10 years of income
Even in neighbouring Asian countries, the total amount of protection a customer carries is probably three or four times and the word protection is really the sum total of all the policies that he owns. I do not quite share the view that insurance is a completely penetrated item in India. It is way short of what even the Asian neighbours have and some day, we would get to the developed world numbers.”


Personally I feel that Life insurance is still considered more as savings product rather than Protection product , may be as education of need for protection expand penetration will also expand in sum assured way (not numbers of policy)

Interesting interview on the same