LIC drives new business premiums of life insurers up 15% YoY in October

The surge in LIC's NBP was primarily driven by a 30% increase in its group single premium

Life Insurance companies reported a 15 per cent year-on-year (YoY) jump in new business premiums (NBP) in October, thanks to a healthy growth in premiums reported by state-owned Life Insurance Corporation (LIC).

Data released by Life Insurance Council shows, in October, the life insurance industry earned premiums to the tune of Rs 24,916.58 crore in October, up 15.32 per cent from the year-ago period. While private insurers premiums rose 11 per cent YoY to Rs 8,996.45 crore, LIC’s premiums were up 18 per cent to Rs 15,920.13 crore.

The healthy jump seen in LIC’s NBP was primarily driven by a 30 per cent increase in its group single premium during this period. Even private life insurers saw a 26 per cent jump in their group single premiums, which drove the 11 per cent jump in their NBP in October.

On a sequential basis, however, NBP of the industry was down 32 per cent.

Among large private sector insurers, ICICI Prudential Life’s NBP increased by 5 per cent YoY in October, while HDFC Life’s NBP rose 4.78 per cent, and SBI Life’s NBP increased by 16.48 per cent during this period.

NBP is the premium acquired from new policies for a particular year. It is the sum of first year premium and single premium, reflecting the total premiums received from the new business written.

In the April-June quarter (Q1FY23), life insurers saw their NBP rise by 40 per cent over the same period a year ago, on account of lower base. Similarly, in the July – September (Q2FY23) quarter, the industry saw its NBP rise 37 per cent YoY, mainly driven by robust growth shown by LIC in the quarter under review.

In FY23 so far, life insurers’ have reported a 34.71 per cent YoY increase in premiums to Rs 2.06 trillion, with LIC’s premium witnessing 42 per cent growth and private insurers growing 21.48 per cent YoY. Growth has tapered down slightly as the impact of low base has eased out.

Experts say, premium growth of life insurers will remain healthy this year, given it is the first year without any restrictions. While it is expected that demand for term, annuity, and guaranteed products will remain robust, unit-linked products may take a hit, given the volatility in equity markets.

 

NBP of Life Insurers	October 2022	YoY change (%)	Upto October 2022	YoY change (%)
Private Life Insurers	8,996.45	11	66,782.31	21.48
Life Insurance Corporation (LIC)	15,920.13	17.92	140,111.20	42.08
Industry Total	24,916.58	15.32	206,893.51	34.71
Note: Amount in Rs crore
Source: Life Insurance Council