Life insurance company new business premiums jump 91% in July

New business premiums (NBP) from life insurance companies jumped 91% year-on-year (YoY) in July, thanks to strong premium growth from the life insurance company (LIC).

According to data released by the Insurance Regulatory and Development Authority of India (Irdai), life insurers reported an NBP of Rs 39,078.90 crore in July. While LIC’s NBP jumped 142% to Rs 29,116.68 crore year-on-year, private insurers’ NBP jumped 18.5% to Rs 9,962.22 crore. In June, the life insurance sector grew by 4.15% in NBP, mainly due to the contraction in LIC premiums.

The NBP is the earned premium of new policies for a given year. This is the sum total of the first year bonus and the single bonus recognized during the year.

The strong growth in LIC premiums in July was mainly due to a jump in collective single and non-single premiums. Private insurers also recorded solid growth in group single premiums and group renewal premiums.

Among the major life insurers by market share, SBI Life’s NBP increased by 29% in July, while ICICI Prudential Life’s NBP increased by 16.20% and Max Life’s by only 1. .67%. In contrast, HDFC Life reported a 6% contraction in NBP over the same period.

So far in FY23, life insurers have reported a 54% year-on-year increase in premiums to Rs 1.12 trillion, with LIC premiums recording 62% growth and private insurers 39% year-on-year growth. In the April to June quarter (Q1FY23), life insurers saw their NBP increase by 40% compared to the same period a year ago, due to a weaker basis.

LIC gained more than 315 basis points of market share from June to July. Since March, LIC has gained more than 500 basis points of market share in terms of NBP.

The general consensus is that premium growth for life insurers will remain healthy this year, given that it is the first year without any restrictions. While demand for term, annuity and guaranteed products is expected to remain robust, unit-linked products could suffer given the volatility in equity markets.

Kristan F. Talley