How well do you know the seasons of Indian life insurance?
Does your guess/ intuition match the data? What do the charts tell?
Can you use that knowledge to run the business operations more profitably?
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The seasons of Indian life insurance
1. The seasons of Indian life insurance
• How well do you know
your seasons?
• Can you use that
knowledge to run the
business operations
more profitably?
Presented by: IBEXI Met Department
( IBEXI Analytics and BI team)
2. Sure, it pours in March every year.
But do you know:
•Which month always has second-
highest sales?
•Is there a greater skew for group vs.
individuals?
•For single premium or regular
premiums?
•Has the skew changed over the last
few years?
•Are there outlier companies? What
do they tell us? • Does your guess/ intuition
•How can a company use its match the data?
seasonality index? • Check it out.
Source: www.irda.gov.in; Note: Sales = Annualised First Year Premiums
3. Which month always has the
second-highest sales?
• Options: Feb; Jan; Dec; Nov.; None of the above.
4. Which month always has the
second-highest sales?
• Options: Feb; Jan; Dec; Nov.; None of the above.
• Answer: None of the above.
– It varies from year to year! In 2006-07, it was November. In
'07-08 and '08-09, it was January. In '09-10, it was December.
In '10-11, it was August! And it was back to January in '11-12.
25%
20%
15%
10%
5%
0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
5. The March sales skew: is it usually
sharper for LIC or for private insurers?
• Options: LIC; Private Insurers
6. The March sales skew: is it usually
sharper for LIC or for private insurers?
• Options: LIC; Private Insurers
• Answer: Usually, and on the average, private
insurers have a sharper March skew than LIC.
30%
25%
20%
15% Private
LIC
10%
5%
0%
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Average
7. In Indian life insurance, which skews
more: individual or group?
• Options: Individual; Group; Similar
8. In Indian life insurance, which skews
more: individual or group?
• Options: Individual; Group; Similar
• Answer: On an average, group business especially
historically. More on it later!
30%
25%
20%
Group
15%
Individual
10%
5%
0%
Average March sales
9. Are the skews the same for regular or
single premium?
• Options: Single premium; Non-single; They are similar
10. Are the skews the same for regular or
single premium?
• Options: Single premium; Non-single; They are similar
• Answer: On an average, across years, the group business has a
greater skew for regular business; but the individual business is
equally skewed for both!
35%
30%
25%
20%
15%
10%
5%
Group Non-Single Premium
Group Single Premium
0% Individual Non-Single Premium
Average Individual Single Premium
11. Has the skew changed over time from
2006 to 2011?
• Options: Yes, it has become less; No, it has not changed.
12. Has the skew changed over time from
2006 to 2011?
• Options: Yes, it has become less; No, it has not changed.
• Answer: Across years -'10-11 and '11-12 - the group business skew has
reduced greatly; but the individual business has changed only a little.
45%
40%
35%
30%
25%
Group
20% Individual
15%
10%
5%
0%
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
14. Which company has the highest skew
in March?
• IndiaFirst, consistently, with 63% and 43% of its new
business in March in '11-12 and '10-11.
– Note: The nearest highest skew is just 29%.
70%
60%
50%
40%
IndiaFirst – 2010
30%
IndiaFirst – 2011
Industry average
20%
10%
0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
15. • Note that the huge March skew of India First is
driven by Group Regular business in each year.
100%
90%
80%
70% 2010 - Group Non-Single Premium 2010 - Group Single Premium
2010 - Individual Non-Single Premium 2010 - Individual Single Premium
60% 2011 -Group Non-Single Premium 2011 -Group Single Premium
2011 -Individual Non-Single Premium 2011 -Individual Single Premium
50%
40%
30%
20%
10%
0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
17. Which company has the lowest skew
in March?
• Max Life: It has 2 comparable sales peaks – one in
December and one in March. The sales push in
March is lowered by the sales push in December!
25%
20%
15%
Max Life – average
Industry average
10%
5%
0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
18. This pattern is consistent across years
Note: the quarterly waves!
25%
20%
15%
10%
5%
0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Max – 2006-07 Max – 2007-08 Max – 2008-09 Max – 2009-10 Max – 2010-11 Max – 2011-12
19. Seasonality measurements need to
take into account
• Options:
– Rate of annual growth/decline
– Regulatory changes
– Management changes
– All of the above
20. Seasonality measurements need to
take into account
• Options:
– Rate of annual growth/decline
– Regulatory changes
– Management changes
– All of the above
• Answer: All of the above
21. You can use your company's
SEASONALITY INDEX for
• Options:
– Performance assessment
– Predicting future trends
– Planning for temp staff for March operations
– Understanding impact of product launches.
– Deciding when to launch advertisement campaigns.
– All of the above
22. You can use your company's
SEASONALITY INDEX for
• Options:
– Performance assessment
– Predicting future trends
– Planning for temp staff for March operations
– Understanding impact of product launches.
– Deciding when to launch advertisement campaigns.
– All of the above
• Answer: All of the above
– Performance assessment should be relative to the normal seasonal variation.
So we should set targets by season to achieve annual targets.
– Predicting future trends e.g. sales figures for the rest of the year.
– Planning for temporary increases or decreases in staff, space etc. to manage
predictable peaks e.g. additional staff for March operations support
– To eliminate it for analysis of other effects, e.g. advertisements, product
launches.
– Make operational decisions for seasons – pricing, advertisements etc.
