How life insurance business delivered in November 2022?

12 Dec 2022 , 10:03 AM

However, in terms of yoy growth in new business, it is LIC that continues to dominate the private insurers by a wide margin. Here are some key points that emerge from the latest monthly report put out by IRDAI.

What stands out in the life insurance new business numbers for November 2022

1. LIC continue to dominate the life insurance market in November 2022 also, with its monthly market share of new business sustaining exactly at the same level as in October 2022. At 67.73%, the market share of LIC in new premium business was exactly the same as the previous month. Overall, the private insurance market share appears to have stabilized in the 30% to 33% range.
2. The overall life insurance premium income for November 2022 at Rs35,459 crore is 42.31% higher on MOM basis and 30.47% higher on a yoy basis. Out of this overall premium income basket, LIC accounted for Rs24,032 crore and private life insurers Rs11,427 crore. On a 8-months cumulative basis for FY23, LIC has a stable market share of 67.73%; still quite impressive.
3. How about the premium mix of LIC and the private insurers in FY23? LIC had a market share of 82.70% in group single premium and 97.37% in group non-single premium. LIC virtually dominates the group life cover space due to its strong corporate and institutional relationships and that is where private insurers are struggling to compete with LIC. However, in individual non-single premiums, private insurers had a market share of 64.73% and even in individual single premium, their market share was an impressive 44.34%.
4. The situation changes drastically if you look at sum assured. Here the private life insurers have an overall market share of 83.92%. What explains this dichotomy? It is due to private life insurers selling more of pure risk term covers where the ratio of sum assured to premium is higher. LIC, predominantly focus on endowments, money-backs and ULIPs for legacy reasons. Hence, it has a lower market share of sum assured since its products are more of savings cum insurance products rather than pure term covers.
5. Finally, let us also look at cumulative growth in life premiums for LIC and the private insurers for FY23 (April to November). Overall insurance premium collections were up 34.07% yoy. However, private life insurers saw growth of just 18.17% in the 8 months to November 2022 while the growth in premium collections of LIC was an impressive 43.26%. LIC dominated November 2022 in monthly and cumulative FY23 growth.

LIC appears to be getting its act together rapidly, as private insurers face the downside risks of intense competition. For LIC, the bigger challenge would be to ensure that this strong performance also reflects in stock prices.

What we read from life premium collections for November 2022

Here are premiums across life insurers for November 2022 and for the first 8 months of the fiscal year FY23 on a cumulative basis.

Insurer Category	Nov 2021	Nov 2022	Growth %	Nov-21 YTD	Nov-22 YTD	Growth %	Share
Private Total	11209.75	11426.73	1.94	66184.52	78209.04	18.17	32.27
Individual Single Premium	1353.37	1720.87	27.15	9944.92	11804.31	18.70	44.34
Individual Non-Single Premium	4224.37	5360.89	26.90	28581.14	34070.17	19.21	64.73
Group Single Premium	5038.46	3699.02	-26.58	23264.08	26472.75	13.79	17.30
Group Non-Single Premium	23.00	2.87	-87.53	161.72	100.51	-37.85	2.63
Group Yearly Renewable Premium	570.56	643.09	12.71	4232.65	5761.30	36.12	92.71
LIC of India	15967.51	24032.07	50.51	114580.89	164143.27	43.26	67.73
Individual Single Premium	2125.30	2179.17	2.53	14598.81	14818.92	1.51	55.66
Individual Non-Single Premium	2244.10	2552.72	13.75	16216.08	18566.81	14.50	35.27
Group Single Premium	11042.50	18635.93	68.77	81313.80	126586.33	55.68	82.70
Group Non-Single Premium	465.47	601.73	29.27	1595.78	3718.42	133.02	97.37
Group Yearly Renewable Premium	90.14	62.52	-30.64	856.41	452.78	-47.13	7.29
Grand Total	27177.26	35458.80	30.47	180765.40	242352.32	34.07	100.00
Individual Single Premium	3478.67	3900.04	12.11	24543.73	26623.23	8.47	100.00
Individual Non-Single Premium	6468.47	7913.61	22.34	44797.23	52636.98	17.50	100.00
Group Single Premium	16080.96	22334.95	38.89	104577.89	153059.09	46.36	100.00
Group Non-Single Premium	488.47	604.60	23.77	1757.49	3818.94	117.29	100.00
Group Yearly Renewable Premium	660.70	705.61	6.80	5089.07	6214.08	22.11	100.00

Data Source: IRDAI

LIC continues to display strong growth traction in October 2022, but predominantly focussed on group policies, which constitute 82.70% of their overall premium flows. Unlike in October, the month of November 2022 has seen positive growth in premium collections for the private insurers and also for LIC. In the case of the private sector players, the growth has been decisively positive in individual policies but sharply negative in group non-single premium categories. However, on an overall basis, single premium policies showed positive premium collection growth across categories in November 2022.

How we interpreted the sum assured numbers for November 2022

Here is sum assured across life insurers for November 2022 and for the first 8 months of fiscal year FY23.

Insurer Category	Nov 2021	Nov 2022	Growth %	Nov-21 YTD	Nov-22 YTD	Growth %	Share
Private Total	368845.08	481700.39	30.60	2810218.56	3447760.67	22.69	83.92
Individual Single Premium	2078.34	1726.39	-16.93	14505.75	12989.45	-10.45	54.96
Individual Non-Single Premium	112296.26	129515.45	15.33	805698.23	870010.62	7.98	71.16
Group Single Premium	109300.41	136062.99	24.49	778032.28	956475.08	22.94	99.92
Group Non-Single Premium	12153.43	15030.94	23.68	157775.65	114953.53	-27.14	88.69
Group Yearly Renewable Premium	133016.64	199364.62	49.88	1054206.64	1493331.99	41.65	84.13
LIC of India	74104.42	71530.39	-3.47	619487.77	660412.37	6.61	16.08
Individual Single Premium	1615.98	1546.37	-4.31	11355.40	10645.42	-6.25	45.04
Individual Non-Single Premium	46779.16	50157.16	7.22	309850.19	352624.40	13.80	28.84
Group Single Premium	66.31	150.24	126.56	465.87	760.55	63.25	0.08
Group Non-Single Premium	1251.28	3662.93	192.73	10844.84	14652.99	35.11	11.31
Group Yearly Renewable Premium	24391.68	16013.69	-34.35	286971.48	281729.01	-1.83	15.87
Grand Total	442949.50	553230.78	24.90	3429706.33	4108173.04	19.78	100.00
Individual Single Premium	3694.33	3272.75	-11.41	25861.15	23634.87	-8.61	100.00
Individual Non-Single Premium	159075.42	179672.61	12.95	1115548.41	1222635.02	9.60	100.00
Group Single Premium	109366.73	136213.22	24.55	778498.15	957235.63	22.96	100.00
Group Non-Single Premium	13404.71	18693.88	39.46	168620.50	129606.52	-23.14	100.00
Group Yearly Renewable Premium	157408.32	215378.32	36.83	1341178.12	1775061.01	32.35	100.00

Data Source: IRDAI

When it comes to sum assured, private insurers clearly have an edge in terms of market share at 83.92%. LIC is building on its term policy sales, but it still has a long way to catch up on sum assured rankings with the private insurers. Clearly, their agency system is attuned to a more commission heavy model of sales. The good news is that, unlike October 2022, LIC saw its sum assured grow by 6.61% yoy, although private insurers grew by 22.7%.

How private life insurers delivered in November 2022

During November 2022, the number of private insurers reduced from 23 to 22, as Exide Life merged into HDFC Life. Out of the 23 private life insurance players, the top 8 insurers in the order of FY23 premium collections were viz. SBI Life, HDFC Life, ICICI Prudential Life, Bajaj Allianz, Aditya Birla Sun Life, Max Life, Tata AIG and Kotak Life accounted for 85.89% of premium collections. This ratio has bounced sharply and could be attributed to the bounce-back in premium income of Bajaj Allianz, Tata AIG and others. For FY23, highest premium growth was visible for Tata AIA Life, Bajaj Allianz and Aditya Birla Sun Life. Life pie is growing but LIC is still taking the lion’s share.