April 2024 premium flows lower, but LIC still does better

24 May 2024 , 01:16 PM

LIC DOES BETTER IN A TEPID APRIL 2024

The Life Insurance Council has released the full month data stack in terms of new business premium (NBP) collections for March 2024. Typically, the Life Insurance Council discloses data on monthly figures and also year to date figures. However, this being the first month of the new fiscal year FY25 (April 2024), the YTD data is not really relevant. It only becomes relevant from the coming month. Apart from the NBP data, the Life Insurance Council has also released data on the number of policies sold by individual insurance companies as well as by private insurers overall, LIC and the life insurance industry. Apart from the monthly numbers and yoy comparison, the Life Insurance Council also provides cumulative performance of private insurers and LIC for fiscal year FY24. However, as we stated earlier, the YTD data is not really relevant in this case due to this being the first month of the fiscal year FY25. While the LIC has done distinctly better in terms of new business premium, it is the private insurers that have an edge in terms of the number of policies sold.

LOOKS LIKE HAPPY DAYS ARE HERE AGAIN FOR LIC

One can also term it the classic recovery story scripted by LIC. This shift has been very pronounced in the last 4 months of FY24 (November 2023 to March 2024), and also in the month of April 2024. Till November 2023, LIC was suffering from the overhang of the taxation shift from the old tax regime to the new tax regime. That had done away w8ith the need for tax planning investments like life insurance, especially for people in the lower and middle income groups. However, the tables have turned since December 2023, as the trend has shifted in favour of LIC. In April 2024, the share of LIC in the new business premiums stood at 61.13%. It is after quite a gap that the NBP share of LIC is bouncing back above 60%. It clearly shows that LIC has grabbed bulk of the new business and also the higher value business that has come in April. As a matter of strategy, LIC has decided to focus on improving the NBP over focusing on the number of policies sold. LIC has a strong and deep relationship with its customers and is now looking at  deepening these linkages so as to improve its revenue and profitability per customer. That strategy appears to be working for LIC, as is evident from the share shift as well as the stock price rally in LIC in last 4 months.

NEW BUSINESS PREMIUM (NBP) GROWTH FOR APRIL 2024

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of April 2024 in terms of first year premiums and the yoy growth in premiums over April 2023. Premiums flows, here, refer to first year premiums only.

PARTICULARS	Premium Flows (Apr-2024)	Premium Flows (Apr-2023)	Growth in NBP YOY (%)
Individual Single Premium	2,575.30	2,045.67	25.89%
Individual Non Single Premium	5,247.51	4,298.70	22.07%
Group Single Premium	11,715.42	5,176.23	126.33%
Group Non Single Premium	131.32	345.52	-61.99%
Group Yearly Renewable Premium	589.31	699.17	-15.71%
Grand Total Premium Flows	20,258.86	12,565.31	61.23%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	1,175.85	1,031.21	14.03%
Individual Non Single Premium	3,471.49	2,776.15	25.05%
Group Single Premium	2,695.21	2,276.61	18.39%
Group Non Single Premium	10.20	5.44	87.50%
Group Yearly Renewable Premium	522.48	665.81	-21.53%
Private Insurer Premium Flows	7,875.22	6,755.21	16.58%
LIC OF INDIA
Individual Single Premium	1,399.45	1,014.47	37.95%
Individual Non Single Premium	1,776.02	1,522.55	16.65%
Group Single Premium	9,020.22	2,899.63	211.08%
Group Non Single Premium	121.12	340.09	-64.39%
Group Yearly Renewable Premium	66.83	33.36	100.33%
LIC Premium Flows	12,383.64	5,810.10	113.14%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

Here are some quick takeaways from the data points on insurance business for April 2024 in terms of the first year premium collections by insurance companies.

• The overall insurance sector saw robust yoy growth in first year premiums of 61.23% in April 2024. This can be attributed to a relatively low base in April 2023 and also to genuine efforts by the insurance industry to push insurance as a standalone product. With the new tax regime in place, the scope for pushing LIC as a tax saving product is diminishing. For long, that was the low-hanging fruit, but that is gradually going away. The undertone of the last few months (since December 2023) has shifted in favour of LIC and the trend has continued in April 2024 also. The private insurers saw NBP expand by just 16.58% in terms of first year premium collections in April 2024 while LIC saw first year premium collections expand by a whopping 113.14% yoy; a contrast to NBP contraction or tepid NBP growth last year. However, overall numbers are lower.
• If you look at the overall premium collections for the month of April 2024 at ₹20,259 Crore, the contributions of LIC has improved compared to the private insurers. For instance, private insurers accounted for38.87% share in April 2024; compared to 39.71% in March 2024, 41.33% in February 2024, and 43.62% in January 2024. In contrast, LIC accounted for 61.13% in April 2024; compared to 60.29% in March 2024, 58.67% in February 2024 and 56.38% in January 2024. The calendar year 2024 has seen a steady progression in the NBP share of LIC and a steady drop in the share of private insurers.

What is working for LIC? Clearly, the single-minded focus of LIC on improving its NBP appears to have worked well in the last 4 months. After a long hiatus, LIC is once again starting to grab market share back from the private insurers.

GROWTH IN NUMBER OF POLICIES FOR APRIL 2024

If you were talk of equivalence between insurance and mutual funds, here it is. If the NBC is the equivalent of AUM of mutual funds, then the number of policies are the rough equivalent of folio. They give an idea of the retail spread of the business. Here we look at the number of policies sold by the insurance companies in April 2024, compared to April 2023. Having seen NBP growth, and market share, let us also look at the insurance sector performance in terms of number of policies sold and the growth of LIC and the private insurance companies on these parameters. The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of April 2024 in terms of growth in the number of policies; with yoy comparison.

PARTICULARS	No. of Policies (Apr-2024)	No. of Policies (Apr-2023)	Growth in Policies YOY (%)
Individual Single Premium	64,024	53,778	19.05%
Individual Non Single Premium	12,54,730	11,37,491	10.31%
Group Single Premium	154	96	60.42%
Group Non Single Premium	275	260	5.77%
Group Yearly Renewable Premium	1,687	1,448	16.51%
Grand Total No. of Policies	13,20,870	11,93,073	10.71%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	20,438	16,426	24.42%
Individual Non Single Premium	4,43,462	3,91,334	13.32%
Group Single Premium	114	83	37.35%
Group Non Single Premium	10	9	11.11%
Group Yearly Renewable Premium	567	525	8.00%
Private Insurer No. of Policies	4,64,591	4,08,377	13.77%
LIC OF INDIA
Individual Single Premium	43,586	37,352	16.69%
Individual Non Single Premium	8,11,268	7,46,157	8.73%
Group Single Premium	40	13	207.69%
Group Non Single Premium	265	251	5.58%
Group Yearly Renewable Premium	1,120	923	21.34%
LIC No. of Policies	8,56,279	7,84,696	9.12%

Data Source: Life Insurance Council (Number of Policies are absolute figures)

Here are some quick takeaways from the data points on insurance for April 2024 in terms of the number of policies sold.

• The overall insurance sector saw yoy growth in number of policies sold at 10.71% yoy for April 2024. There was a dichotomy, once again. Private insures saw growth of 13.77% in number of policies sold in April 2024 while LIC saw number of policies sold grow by 9.12%. One must admit that this gap has substantially narrowed in the last few months. For the first half of FY24, positive growth in number of policies sold came from private insurers while However, this gap has substantially narrowed in April 2024. Even amidst the focus on NBP, LIC appears to be doing a good job on number of policies growth too.
• If you look at the overall number of policies sold for April 2024 at 13.21 Lakh policies, the contributions of LIC and private insurers are still far off. However, private insurers saw their share of number of policies bounce back sharply to 35.17% in April 2024; compared to 24.31% in March 2024, 27.36% in February 2024, and 31.14% in January 2024. In contrast, LIC saw its share of number of policies shrink to 64.83% in April 2024; compared to 75.69% in March 2024, 72.64% in February and 68.86% in January 2024.

Let us now turn to how the five largest private life insurers saw NBP growth adding up in the month of April 2024.

HOW THE KEY PRIVATE LIFE INSURERS FARED IN APRIL 2024?

In the month of April 2024, private insurers struggled for growth in new business premium (NBP), compared to LIC. Here is a look at the 5 major private life insurers, whose NBP accounts for 70% of the total NBP collected by private insurers in April 2024. Let us begin with SBI Life Insurance.

SBI LIFE INSURANCE COMPANY	Apr-24 NBP (₹ in Crore)	Apr-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	472.89	440.19	7.43%
Individual Non Single Premium	772.58	640.91	20.54%
Group Single Premium	420.24	232.28	80.92%
Group Non Single Premium	1.44	2.50	-42.40%
Group Yearly Renewable Premium	21.26	20.98	1.33%
Total	1,688.41	1,336.87	26.30%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

With NBP of ₹1,688.41 Crore in April 2024, SBI Life Insurance has seen 26.3% growth in new business premium in April 2024 on a yoy basis. The significant growth of 80.9% came from Group single premium policies followed by individual non-single premium policy NBP growing at 20.5%. The group non-single category witnessed contraction of -42.4% in April 2024, albeit on a small base. Let us now shift to HDFC Life Insurance.

HDFC LIFE INSURANCE COMPANY	Apr-24 NBP (₹ in Crore)	Apr-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	226.17	181.85	24.37%
Individual Non Single Premium	588.77	452.17	30.21%
Group Single Premium	745.38	851.23	-12.43%
Group Non Single Premium	0.00	0.00
Group Yearly Renewable Premium	14.86	24.82	-40.13%
Total	1,575.17	1,510.08	4.31%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

With NBP of ₹1,575.17 Crore in April 2024, HDFC Life Insurance has seen flat 4.31% growth in new business premium in April 2024 on a yoy basis. The significant growth of 30.2% came from individual non-single premium policies followed by individual premium policies. The group yearly renewable category witnessed contraction of -40.1% in April 2024, while group single premiums also contracted in April 2024. Let us now shift to ICICI Prudential Life Insurance.

ICICI PRUDENTIAL LIFE INSURANCE	Apr-24 NBP (₹ in Crore)	Apr-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	98.93	106.29	-6.92%
Individual Non Single Premium	390.77	222.87	75.34%
Group Single Premium	342.31	264.68	29.33%
Group Non Single Premium	0.00	0.00
Group Yearly Renewable Premium	107.89	139.70	-22.77%
Total	939.91	733.55	28.13%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

With NBP of ₹939.91 Crore in April 2024, ICICI Prudential Life Insurance has seen 28.13% growth in new business premium in April 2024 on a yoy basis. The significant growth of 75.3% came from Individual non-single premium policies followed by Group single premium policies NBP. The group yearly renewable premium category witnessed contraction of -22.77% in April 2024, while individual single premiums also contracted in April 2024. Let us now shift to Bajaj Allianz Life Insurance.

BAJAJ ALLIANZ LIFE INSURANCE	Apr-24 NBP (₹ in Crore)	Apr-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	43.90	35.58	23.38%
Individual Non Single Premium	328.49	268.87	22.17%
Group Single Premium	193.34	125.71	53.80%
Group Non Single Premium	0.00	0.00
Group Yearly Renewable Premium	123.35	120.24	2.59%
Total	689.09	550.40	25.20%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

With NBP of ₹689.09 Crore in April 2024, Bajaj Allianz Life Insurance has seen 25.2% growth in new business premium in April 2024 on a yoy basis. The significant growth of 53.8% came from Group single premium policies followed by individual single premium and individual non-single premium policies. Bajaj Allianz did not witness any of the categories contracting. Let us now shift to Max Life Insurance.

MAX LIFE INSURANCE COMPANY	Apr-24 NBP (₹ in Crore)	Apr-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	121.42	93.79	29.46%
Individual Non Single Premium	272.02	205.71	32.23%
Group Single Premium	94.87	48.33	96.30%
Group Non Single Premium	0.00	0.00
Group Yearly Renewable Premium	17.30	11.03	56.84%
Total	505.61	358.86	40.89%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore)

With NBP of ₹505.61 Crore in April 2024, Max Life Insurance has seen the best 40.9% growth in new business premium in April 2024 on a yoy basis. The significant growth of 96.3% came from Group single premium policies followed by Group yearly renewable premium at 56.84% growth. Like Bajaj Allianz, Max Life Insurance also witnessed growth across all categories of policies.

The big story of April 2024 is that LIC has consolidated its leadership position and has taken market share back from the private insurers. That is something for LIC to celebrate.