Life insurers play tax-free interest arbitrage game to rev up business

While most insurance schemes aren't tax-free anymore, assured return products are among the few exceptions

November’s life insurance premium flow data came as a shocker after four consecutive months of promising growth. But here’s the interesting thing. While the overall private life insurers’ premium inflows contracted by 7 per cent year-on-year, those of HDFC Life rose by 20.4 per cent and ICICI Prudential Life (I-Pru Life) and SBI Life witnessed 30.8 per cent and 5.7 per cent year-on-year decline in November.

To understand the outperformance, one needs to deconstruct the composition of growth. After the initial months (April and May) of protection plans-led recovery, the trend has since steadily tapered and the focus has shifted