Life insurance companies reported a 17 percent year-on-year (YoY) drop in new business premium (NBP) in February. As state-owned Life Insurance Corporation of India's premiums shrank by 32 percent during the period due to decline in group single premium segment.
According to data released by the Life Insurance Council, the industry earned an new business premium (NBP) of Rs 22,847.65 crore in February a drop of 17 percent, as compared to Rs 27465.12 crore in the same period a year ago.
In January, the industry reported a 20 per cent hike in premiums driven by the performance of private sector companies (23 percent year-on-year growth), while LIC saw its premium increase by 18 percent year-on-year. In February, private sector companies saw a 10 per cent rise in premiums to Rs. 10,968 crore, insurance behemoth LIC's premium fell 32 per cent to Rs 11,879.49 crore. LIC earned premium of Rs 17,489 crore in the same period a year ago.
For LIC, the group single premium was a dampener, dipping over 40 percent in February, dragging down its NBP. Data shows LIC earned a little over Rs 7,092 crore as group single premium in February 2023, compared with Rs 12,062 crore in the year-ago period, as the number of group policies or schemes sold by LIC during this period dropped to 19 from 32 in the same period a year ago.
NBP is the premium acquired from new policies in a year. It is the sum of the first-year premium and single premium, reflecting the total premium received from new businesses.
For private sector companies, individual non-single premiums saw decent growth.
In 2022-23 (FY23) thus far, life insurers have reported a 25.06 percent YoY increase in overall premiums to Rs 3.18 trillion, with LIC's premium growing 29.88 percent, and private insurers' premiums growing at 17.38 percent.
Year-to-date (YTD), FY23 growth can primarily be attributed to group single premiums and a low base. Meanwhile, private players have been extending their lead in the individual non-single premium segment.
On an annual premium equivalent (APE) basis, the insurance industry posted muted retail APE growth of 10.5 percent YoY for February, with the private sector growing at 18.2 percent and LIC's retail APE declining 3 percent YoY over the same period.
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