Data given by CARE, suggests that overall life insurance industry in India recorded a first-year premium income of Rs 2.6 lakh crore during FY20 as against Rs 1.1 lakh crore during FY10. Such has resulted in a CAGR growth of 8.2% (FY10-FY20).
Further, the data reveals that private sector insurers posted a CAGR of 7.0% growth (FY10- FY20) in their first-year premium income, LIC recorded 8.7% CAGR growth.
It needs to be noted that, LIC has continued to be the main driver of the life insurance industry premium accounting for ~69% of the total first-year premium collected in FY20. While the remaining was held by 31%.
CARE in its report said, "Individual single and non-single premium income continues to play a major role for LIC as they contributed 50.5% of total first-year individual premium income in FY20 (61.3% in FY10). However, the share has declined by ~11% over a decade."
LIC has the highest share of 75.9% in FY20 when it comes to the number of policies, as against private insurers who account for 24.1%.
With that, during FY20, life insurers issued total 288.9 lakh new individual policies, out of which LIC issued 218.9 lakh policies and private life insurers issued 69.5 lakh policies, CARE's data added.
Interestingly, the CARE data also reveals that the market share of private insurers in total sum assured for individual first-year premium has been improved to 67.7% in FY20 as compared to 61.9% in FY18, while LIC’s share declined to 32.4% in FY20 as compared to 38.1% in FY18.
The note added that declining market share of LIC as compared to private players is further noticeable for the month of April 2020 as well, where LIC has lost share from 53.3% in April 2019 to a sharper decline to 44.4% in April 2020.
Even as LIC has gained a 0.5% share in overall first-year premium for April 2020, however, CARE says, private companies have gained a 7% share in sum assured as private companies have sold a larger share of protection plans which have a higher sum assured as compared to traditional plans.
CARE concluded saying, the insurance business is expected to witness muted growth in the first quarter of FY21 due to COVID-19 and subsequently extended lockdown, however, protection plans could witness an increase due to rising awareness and the online channel could see robust growth.