After witnessing strong growth in November, life insurance companies reported moderation in new business premium (NBP) growth in December. From a 30 percent rise in November, NBP growth slowed to 10 percent last month as premium growth at the state-owned life insurer eased from a peak.
According to data released by the Life Insurance Council, the NBP of life insurance companies grew by 10 percent year-on-year (YoY) to Rs 26,838.29 crore. While private sector life insurers reported premia to the tune of Rs 14,979.79 crore, up 15 percent year-on-year, LIC's premium rose 3.71 percent to Rs 11,858.50 crore.
NBP is the premium received from new policies for a particular year. It is the sum of the first year premium and the single premium, which reflects the total premium received from new businesses.
LIC saw moderation in premia due to decline in group single premia. LIC is the largest player in the group single premium market.
Private insurers posted healthy growth in premia, aided by a 16 percent increase in individual single and non-single premia. Group Single Premia also saw strong growth of 12 percent.
Among large private players, in December, HDFC Life's NBP fell 7.42 percent, ICICI Prudential Life Insurance's premia grew 5.37 percent, and Max Life Insurance's premia rose around 2 percent. SBI Life's premium grew around 30 percent during the same period, helped by individual non-single premia and individual single premia.
In 2022-23, so far, life insurers have reported a 31.16 percent YoY increase to Rs 2.69 trillion, with LIC's premium witnessing 39.67 percent growth, and private insurers growing 17.64 percent YoY.
Year-to-date FY23 growth can primarily be attributed to group single premia and a low base. Meanwhile, private players have been extending their lead in the individual non-single premium segment.
According to experts, growth in the sector will increase as the last quarter of a financial year is usually busy for life insurers as customers prefer to buy savings and term products for tax-saving purposes. Also, the reforms undertaken by the regulator are expected to give a boost to insurers' premiums.
“Growth would be driven by a supportive regulatory landscape (ease of doing business, Bima Sugan) and strong demand for annuity and protection plans, along with increased persistency levels. Other factors include an intense push to increase insurance coverage, especially in the rural populace, product innovations/customisation, and allowing corporate agents to take on additional companies”, said CareEdge in a report.
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