Life insurers reported 48 per cent year-on-year growth in new business premium (NBP) in February, on the back of strong growth in the Life Insurance Corporation of India (LIC) coupled with an uptick in premiums of private insurers.
According to data released by the Life Insurance Council, the NBP of life insurance companies came in at Rs 33,913.18 crore, 48.43 per cent higher from Rs 22,847.65 crore in the year-ago period. While LIC’s premium rose by 67.48 per cent to Rs 19,896.01 crore as compared to Rs 11,879.49 crore, the private life insurance companies reported a 27.80 per cent growth in premiums to Rs 14,017.17 crore from Rs 10,968.16 crore.
NBP is the premium acquired by life insurance companies from new policies for a particular year. It is the sum of the first-year premium and single premium, reflecting the total premium received from the new businesses.
LIC witnessed growth in premiums because of a surge in group single premiums. LIC is the largest player in the group single premium market. The group single premiums of the company nearly doubled to Rs 14,661.31 crore. Meanwhile, even as private insurers lead in the individual segment, they posted healthy growth in premiums across segments.
Amongst large private players, the largest private life insurer, SBI Life’s premium grew around 32 per cent to Rs 2,648.86 crore. Meanwhile, other private sector players also posted healthy growth. HDFC Life’s NBP rose by 14.49 per cent to Rs 2,602.11 crore, ICICI Prudential Life Insurance’s premiums increased 32.54 per cent to Rs 1,763.33 crore.
The NBP of Bajaj Allianz Life grew by 12.92 per cent to Rs 1,050.04 crore and Max Life Insurance’s premiums climbed around 51 per cent to Rs 1097.09 crore.
According to experts, the February – March period is important for insurance companies typically because customers buy policies and products for tax-saving purposes by late January or in February, which is likely to have led to the growth in the premium.
In the April to February period of FY24, the NBP of life insurers slipped 0.22 per cent year-on-year to Rs 3,17,746 crore as compared to Rs 3,18,461 crore. LIC’s premium dropped by 8.35 per cent to Rs 2,03,182 crore, whereas private insurers grew by 14.09 per cent year-on-year to Rs 1,15,278 crore.
The year-to-date performance of the companies has been tepid in FY24 as compared to the year-ago period, with customers buying policies in March 2023 due to tax imposed on life insurance policies with an annual premium over Rs 5 lakh during the Union Budget of 2023.
“After this strong growth in FY23, the industry has witnessed a slowdown over YTDFY24. The fall in performance can be attributed to customers purchasing insurance policies in March 2023, right before the implementation of budgetary changes, and a deceleration in group business. The life insurance enterprises have been strategically adjusting their policy portfolio to promote growth, albeit the aggregate new business premiums have been negative for the YTDFY24,” noted CareEdge in a report.
“Despite these short-term fluctuations, the overarching growth potential of the life insurance segment remains resilient. This can be attributed to factors, such as the existing protection gap within the market, a regulatory framework that fosters industry development (‘Insurance for all’ by 2047), and the sustained necessity for insurance provisions,” it added.
First Published: Mar 08 2024 | 9:34 PM IST