Life insurance company new business premiums jump 37% in March
Life insurers reported a strong increase in new business premiums (NBP) in March – at 37% – due to the strong performance of the Life Insurance Corporation (LIC) initial public offering, whose NBP increased by 51%. % compared to the same period. month of the previous year.
Additionally, after posting single-digit growth in FY21, the first full year of the pandemic, the industry returned to double-digit growth in FY22, with NBP of 13%.
In FY22, private sector insurers recorded a 23% growth rate in NBP to Rs 1.15 trillion, while LIC saw its NBP increase by over 8% to Rs 1.98 trillion of rupees, which resulted in the growth of the NBP of the industry to 3.14 trillion rupees.
At the end of FY22, LIC’s market share in terms of NBP stood at 63.5%, down 293 basis points from March 2021.
However, in FY22, the growth was lower than in FY20, when NBP increased by more than 20%. Growth was 7.49% in FY21.
Generally, March is the best month for life insurance companies, as sales of tax-saving policies increase during this time. During the month, the industry’s NBP jumped to Rs 59,608.92 crore, according to data released by the Insurance Regulatory and Development Authority of India (Irdai).
NBP refers to earned premiums from new policies for a given year.
“The robust growth in monthly figures can be attributed to an increase in single premiums for the individual and group segments in the last month of the financial year (individuals undertaking tax planning measures), with LIC significantly outpacing its private peers for the second month. in a row,” Care Edge said in a report.
“LIC recorded strong growth of 51% year-on-year, mainly due to the 60% year-on-year growth of new group premiums. Comparatively, the private sector grew at 13% annually, balanced with individual and group segments growing at 13% and 12%, respectively,” said Rushabh Gandhi, Deputy Managing Director, IndiaFirst Life Insurance.
Among the listed players, SBI Life’s NBP increased by 11% while HDFC Life recorded an increase of 6%. For ICICI Prudential Life, it was a meager 1.56% appreciation, data shared by Irdai shows.
For Max Life, it was a 15% increase in NBP in March, while Bajaj Allianz Life Insurance saw a 29.5% increase.
NS Kannan, Managing Director and Chief Executive Officer, ICICI Prudential Life Insurance, said after the insurer’s fourth quarter results: “Despite the disruption caused by the third wave of Covid-19, which impacted the productivity in January and February, we were able to show resilience in our operations. In March, we posted the best monthly sales ever for the company since its inception. This helped grow our new business value by 33% year-on-year to Rs 2,163 crore for FY22 with a strong VNB (new business value) margin of 28%.
When the pandemic arrived, growth rates plummeted due to supply issues, and just as they leveled off, the second wave hit insurers hard as a large number of death claims gnawed at their profits. After the second wave, however, growth resumed as supply issues eased.
Life insurers paid around 225,000 Covid-related death claims, or more than Rs 17,000 crore.
The industry saw strong growth in protection activity during the year as consumer awareness and perception of risk increased due to the pandemic. Guaranteed products as well as annuity products also experienced good growth during this period. While unit-linked products have experienced moderate growth due to equity market volatility, they are expected to recover gradually.
LIC, which has traditionally sold more products with face value, has signaled its intention to expand its no-face value business, which should bode well for the industry given its huge reach.
Care Edge expects the life insurance industry to continue to grow 12-14% over three to five years.