Here is how life insurance business fared in August 2023

21 Sep 2023 , 09:12 AM

This report by IRDAI encompasses data on first year premium collections and the number of policies sold; apart from the total sum assured. The total sum assured has been traditionally dominated by the private insurance companies as their focus has been on the term policy business, which has a high ratio of policy value to premium value. The macro comparison that IRDA offers on a monthly basis gives a rapid data insight into the monthly performance of life insurers as well as the year-to-date (YTD) performance of the insurance business. For instance, as of the close of August 2023, the IRDAI provides premium growth and number of policies growth data for the cumulative 5 months of FY24.

The data provided by the IRDAI, covers LIC and the private insurers separately, but also gives consolidated view of all life insurers. On the private insurance front, there is data on each of the registered life insurance player in India. In terms of first year premium, LIC continued to report negative growth. Even in terms of cumulative premiums collected for FY24, LIC continues to be in the negative zone. This time around, even on the basis of number of policies sold, LIC has reported very tepid numbers on an August month basis, while on a cumulative basis for FY24, the numbers are clearly in the negative. 

First year Premium Growth for August 2023

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of August 2023 in terms of first year premiums and the growth in the premiums over August 2022. Premiums flows, here, refer to first year premiums only.

PARTICULARS	Premium Flows  (Aug 2023)	Premium Flows  (Aug 2022)	Growth YOY (%)
Individual Single Premium	3,970.95	3,784.86	4.92%
Individual Non Single Premium	8,298.32	7,224.10	14.87%
Group Single Premium	13,061.75	20,288.05	-35.62%
Group Non Single Premium	547.77	460.00	19.08%
Group Yearly Renewable Premium	909.77	1,099.37	-17.25%
Grand Total Premium Flows	26,788.55	32,856.38	-18.47%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	1,708.69	1,669.05	2.38%
Individual Non Single Premium	5,735.05	4,726.77	21.33%
Group Single Premium	4,307.83	3,555.20	21.17%
Group Non Single Premium	14.29	18.59	-23.13%
Group Yearly Renewable Premium	730.16	1,004.64	-27.32%
Private Insurer Premium Flows	12,496.02	10,974.25	13.87%
LIC OF INDIA
Individual Single Premium	2,262.26	2,115.81	6.92%
Individual Non Single Premium	2,563.26	2,497.34	2.64%
Group Single Premium	8,753.92	16,732.84	-47.68%
Group Non Single Premium	533.48	441.41	20.86%
Group Yearly Renewable Premium	179.61	94.73	89.60%
LIC Premium Flows	14,292.53	21,882.13	-34.68%

Data Source: IRDAI

Here are some quick takeaways from the data points on insurance for August 2023 in terms of the first year premium collections by insurance companies.

• The overall insurance sector saw contraction in first year premium collections by a steep -18.47% for August 2023 as compared to the year ago period. However, there was a dichotomy. The private insures saw growth of 13.87% in terms of first year premium collections in August 2023 while the LIC saw first year premium collections contract by a rather steep -34.68%.

   

• If you look at the overall premium collections for the month of August 2023 at Rs26,789 crore, the contributions of LIC and private insurers are almost converging. Private insurers accounted for 46.64% while LIC accounted for 53.36%. Private insurers are fast catching up with LIC on monthly premium flow basis.

   

• In terms of specific segments, private insurers saw growth across individual single premium, individual non-single premium, and group single premium, while seeing negative growth across Group non-single and group yearly renewable premium. For LIC, positive growth was seen across individual single premium, individual non-single premium, group non-single premium and group yearly renewable premium  while negative growth was visible in group single premium.

First year Premium Growth for FY24 (Apr-23 to Aug-23)

The table below captures the performance of LIC, private insurers and the overall insurance sector for the cumulative first 5 months to FY24.

PARTICULARS	Premium Flows  (FY24)	Premium Flows  (FY23)	Growth YOY (%)
Individual Single Premium	16,152	15,452	4.53%
Individual Non Single Premium	33,097	30,595	8.18%
Group Single Premium	72,246	93,361	-22.62%
Group Non Single Premium	1,652	1,999	-17.36%
Group Yearly Renewable Premium	4,513	4,203	7.37%
Grand Total Premium Flows	1,27,661	1,45,610	-12.33%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	7,329	6,800	7.79%
Individual Non Single Premium	21,878	19,377	12.91%
Group Single Premium	19,809	16,199	22.28%
Group Non Single Premium	41	71	-42.78%
Group Yearly Renewable Premium	4,088	3,964	3.11%
Private Insurer Premium Flows	53,144	46,411	14.51%
LIC OF INDIA
Individual Single Premium	8,823	8,652	1.97%
Individual Non Single Premium	11,219	11,218	0.01%
Group Single Premium	52,437	77,162	-32.04%
Group Non Single Premium	1,612	1,928	-16.42%
Group Yearly Renewable Premium	426	239	77.91%
LIC Premium Flows	74,516	99,200	-24.88%

Data Source: IRDAI

Here are some quick takeaways from the data points on insurance for FY24 (Apr-Aug) in terms of the first year premium collections by insurance companies.

• The overall insurance sector saw contraction in first year premium collections by a steep -12.33% for FY24 (Apr-Aug) as compared to the year ago period. However, there was a dichotomy. The private insures saw growth of 14.51% in terms of first year premium collections in FY24 (Apr-Aug) while the LIC saw first year premium collections contract by a rather steep -24.88% in the same cumulative period.

   

• If you look at the overall premium collections for the period of FY24 (Apr-Aug) at Rs1,27,661 crore, the contributions of LIC and private insurers are starting to converge gradually. Private insurers accounted for 41.63% while LIC accounted for 58.37%. Private insurers are fast catching up with LIC on cumulative premium flow basis too.

   

• In terms of specific segments, private insurers saw growth across individual single premium, individual non-single premium, group single premium, and group yearly renewable premium while seeing negative growth in Group non-single premium only. For LIC, positive growth was seen across individual single premium, individual non-single premium, and group yearly renewable premium  while negative growth was visible in group single premium and group non-single premium categories.

Growth in Number of Policies for August 2023

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of August 2023 in terms of growth in the number of policies.

PARTICULARS	No. of Policies (Aug 2023)	No. of Policies (Aug 2022)	Growth YOY (%)
Individual Single Premium	1,17,249	1,04,999	11.67%
Individual Non Single Premium	23,07,851	21,57,700	6.96%
Group Single Premium	180	173	4.05%
Group Non Single Premium	377	557	-32.32%
Group Yearly Renewable Premium	3,319	2,934	13.12%
Grand Total Premium Flows	24,28,976	22,66,363	7.18%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	21,098	19,896	6.04%
Individual Non Single Premium	6,94,530	5,89,400	17.84%
Group Single Premium	146	96	52.08%
Group Non Single Premium	15	41	-63.41%
Group Yearly Renewable Premium	682	430	58.60%
Private Insurer Premium Flows	7,16,471	6,09,863	17.48%
LIC OF INDIA
Individual Single Premium	96,151	85,103	12.98%
Individual Non Single Premium	16,13,321	15,68,300	2.87%
Group Single Premium	34	77	-55.84%
Group Non Single Premium	362	516	-29.84%
Group Yearly Renewable Premium	2,637	2,504	5.31%
LIC Premium Flows	17,12,505	16,56,500	3.38%

Data Source: IRDAI

Here are some quick takeaways from the data points on insurance for August 2023 in terms of the number of policies sold.

• The overall insurance sector saw growth in terms of number of policies sold by 7.18% for August 2023 as compared to the year ago period. However, there was a dichotomy. The private insures saw growth of 17.48% in terms of number of policies sold in August 2023 while the LIC saw number of policies sold grow by a nominal 3.38% in the same period.

   

• If you look at the overall number of policies sold for August 2023 at 24.29 lakhs, the contributions of LIC and private insurers are still far off. Private insurers accounted for 29.50% while LIC accounted for 70.50%. LIC still appears to have a lead here due to the strong feet on street, but private insurers are surely catching up.

   

• In terms of specific segments, private insurers saw growth in policies across individual single premium, individual non-single premium, group single premium, and group yearly renewable premium while seeing negative growth in Group non-single premium only. For LIC, positive growth was seen in number of policies across individual single premium, individual non-single premium, and group yearly renewable premium  while negative growth was visible in group single premium and group non-single premium categories.

Growth in number of policies for FY24 (Apr-23 to Aug-23)

The table below captures the performance of LIC, private insurers and the overall insurance sector for FY24 (Apr-Aug) on the basis of the number of policies sold.

PARTICULARS	No. of Policies (FY24)	No. of Policies (FY23)	Growth YOY (%)
Individual Single Premium	4,42,660	4,53,429	-2.38%
Individual Non Single Premium	90,93,349	92,91,739	-2.14%
Group Single Premium	711	851	-16.45%
Group Non Single Premium	1,738	2,366	-26.54%
Group Yearly Renewable Premium	13,845	10,981	26.08%
Grand Total Premium Flows	95,52,303	97,59,366	-2.12%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	96,989	95,340	1.73%
Individual Non Single Premium	28,56,538	26,10,546	9.42%
Group Single Premium	585	416	40.63%
Group Non Single Premium	54	111	-51.35%
Group Yearly Renewable Premium	2,954	1,623	82.01%
Private Insurer Premium Flows	29,57,120	27,08,036	9.20%
LIC OF INDIA
Individual Single Premium	3,45,671	3,58,089	-3.47%
Individual Non Single Premium	62,36,811	66,81,193	-6.65%
Group Single Premium	126	435	-71.03%
Group Non Single Premium	1,684	2,255	-25.32%
Group Yearly Renewable Premium	10,891	9,358	16.38%
LIC Premium Flows	65,95,183	70,51,330	-6.47%

Data Source: IRDAI

Here are some quick takeaways from the data points on insurance for FY24 (Apr-Aug) in terms of the number of policies sold.

• The overall insurance sector saw contraction in terms of number of policies sold by a marginal -2.12% for FY24 (Apr-Aug) as compared to the year ago period. However, there was a dichotomy. The private insures saw growth of 9.20% in terms of number of policies sold in FY24 (Apr-Aug) while the LIC saw number of policies sold contract by a rather steep -6.47% in the same period.

   

• If you look at the overall number of policies sold for FY24 (Apr-Aug) at 95.52 lakhs, the contributions of LIC and private insurers are still far off. Private insurers accounted for 30.96% while LIC accounted for 69.04%. LIC still appears to have a lead here due to the strong feet on street, but private insurers are surely catching up.

   

• In terms of specific segments, private insurers saw growth in policies across individual single premium, individual non-single premium, group single premium, and group yearly renewable premium while seeing negative growth in Group non-single premium only. For LIC, positive growth was seen only in group yearly renewable premiums while it saw negative growth in policies in individual single premium, individual non-single premium, group single premium and group non-single premium categories.

The pressure on LIC from multiple fronts is obvious. The change in the tax rules and the government encouraging the shift to the new tax regime has worked against LIC. They need to come up with a new narrative and that could really test how the stock of LIC performs in the market in the coming months.