How life insurance business performed in December 2022

11 Jan 2023 , 05:09 AM

In terms of yoy growth in new business, LIC dominates at 39.7% even as the private insurers lag behind at 17.6%. Here are some key points that emerge from the latest monthly report by IRDAI.

What we read from new business numbers of life insurance for December 2022

1. LIC continues to dominate the life insurance market in December 2022 also, also its market share has seen a dip compared to the previous month. For LIC, the monthly market share of new business fell from 67.73% in the months of October and November 2022 to a lower level of 65.38% in the month of December 2022. The private sector players improved their market share of new premiums from around 32.3% to 34.6%, largely driven by sharp growth in individual single and non-single premiums. All the above market shares are based on cumulative premiums up to a particular month for FY23. Market shares are not based on standalone monthly premiums.

    

2. The overall life insurance premium income for December 2022 at Rs26,838 crore is nearly 25% lower on MOM basis and 9.69% higher on a yoy basis. Out of this overall premium income basket, LIC accounted for Rs11,859 crore and private life insurers Rs14,980 crore. On a 9-months cumulative basis for FY23, LIC saw fall in its market share from 67.73% to 65.38%; albeit still impressive.

    

3. How about the premium mix of LIC and the private insurers in FY23? LIC had a market share of 81.19% in group single premium and 97.43% in group non-single premium. LIC virtually dominates the group life cover space which can be attributed to its strong corporate and institutional relationships. However, in individual non-single premiums, private insurers had a market share of 66.04% and even in individual single premium, their market share was an impressive 44.87%.

    

4. However, the situation is starkly different if you look at sum assured. Here private life insurers have an overall market share of 84.37%. This can be attributed to private life insurers selling more of pure risk term covers where the ratio of sum assured to premium is higher. LIC, is focused on endowments, money-backs and ULIPs. Hence, it has a lower market share of sum assured compared to private insurers.

    

5. Finally, let us also look at cumulative growth in life premiums for LIC and the private insurers for FY23 (April to December). Overall insurance premium collections were up 31.16% yoy. However, private life insurers saw growth of just 17.64% in the 9 months to December 2022 while the growth in premium collections of LIC was an impressive 39.67%. December may have been challenging, but LIC is still doing well in FY23.

For LIC, the bigger challenge would be to ensure that this strong performance also reflects in stock prices. 

Evaluating life premium collections for December 2022

Here are premiums across life insurers for December 2022 and for the first 9 months of the fiscal year FY23 on a cumulative basis.

Insurer Category	Dec 2021	Dec 2022	Growth %	Dec-21 YTD	Dec-22 YTD	Growth %	Share
Private Total	13032.33	14979.79	14.94	79216.84	93188.83	17.64	34.62
Individual Single Premium	1828.90	2183.38	19.38	11773.82	13987.69	18.80	44.87
Individual Non-Single Premium	6807.74	7884.59	15.82	35388.88	41954.76	18.55	66.04
Group Single Premium	3807.78	4245.14	11.49	27071.87	30717.89	13.47	18.81
Group Non-Single Premium	114.17	9.29	-91.86	275.88	109.80	-60.20	2.57
Group Yearly Renewable Premium	473.74	657.38	38.76	4706.39	6418.68	36.38	92.39
LIC of India	11434.13	11858.50	3.71	126015.01	176001.77	39.67	65.38
Individual Single Premium	2072.46	2370.06	14.36	16671.27	17188.98	3.11	55.13
Individual Non-Single Premium	2938.50	3005.13	2.27	19154.58	21571.94	12.62	33.96
Group Single Premium	6017.79	5966.87	-0.85	87331.60	132553.21	51.78	81.19
Group Non-Single Premium	313.20	440.50	40.65	1908.98	4158.92	117.86	97.43
Group Yearly Renewable Premium	92.18	75.94	-17.61	948.59	528.72	-44.26	7.61
Grand Total	24466.46	26838.29	9.69	205231.86	269190.61	31.16	100.00
Individual Single Premium	3901.36	4553.44	16.71	28445.08	31176.67	9.60	100.00
Individual Non-Single Premium	9746.24	10889.73	11.73	54543.47	63526.71	16.47	100.00
Group Single Premium	9825.58	10212.01	3.93	114403.47	163271.10	42.72	100.00
Group Non-Single Premium	427.36	449.79	5.25	2184.86	4268.73	95.38	100.00
Group Yearly Renewable Premium	565.92	733.32	29.58	5654.98	6947.40	22.85	100.00

Data Source: IRDAI

What are the takeaways? For December, the private sector insurers scored over LIC, although LIC still dominates on a cumulative FY23 basis. LIC does have predominant focus on group policies, which constitute 77.98% of their overall premium flows. Unlike in November 2022 premium growth has been much lower than private insurers and even monthly premium collections of LIC are lower than private players. However, on an overall basis, single premium policies showed positive premium collection growth across categories in December 2022; and this applied to LIC and to private insurers.

Looking at the sum assured numbers for December 2022

Here is sum assured across life insurers for December 2022 and for the first 9 months of fiscal year FY23.

Insurer Category	Dec 2021	Dec 2022	Growth %	Dec-21 YTD	Dec-22 YTD	Growth %	Share
Private Total	522216.26	551527.43	5.61	3332432.05	3999287.68	20.01	84.37
Individual Single Premium	2628.12	2266.26	-13.77	17133.87	15255.70	-10.96	55.17
Individual Non-Single Premium	187876.52	178172.29	-5.17	993571.98	1048182.50	5.50	71.65
Group Single Premium	134873.88	151413.31	12.26	912906.16	1107888.39	21.36	99.92
Group Non-Single Premium	10477.83	6322.21	-39.66	168253.49	121275.75	-27.92	88.11
Group Yearly Renewable Premium	186359.91	213353.35	14.48	1240566.55	1706685.34	37.57	85.21
LIC of India	80048.91	80234.45	0.23	699536.69	740646.82	5.88	15.63
Individual Single Premium	1772.39	1749.06	-1.32	13127.78	12394.47	-5.59	44.83
Individual Non-Single Premium	67368.15	62192.52	-7.68	377218.34	414816.92	9.97	28.35
Group Single Premium	163.97	78.08	-52.38	629.83	838.63	33.15	0.08
Group Non-Single Premium	2080.20	1717.08	-17.46	12925.04	16370.07	26.65	11.89
Group Yearly Renewable Premium	8664.22	14497.71	67.33	295635.70	296226.72	0.20	14.79
Grand Total	602265.17	631761.88	4.90	4031968.73	4739934.50	17.56	100.00
Individual Single Premium	4400.51	4015.32	-8.75	30261.65	27650.17	-8.63	100.00
Individual Non-Single Premium	255244.67	240364.82	-5.83	1370790.32	1462999.43	6.73	100.00
Group Single Premium	135037.84	151491.39	12.18	913536.00	1108727.02	21.37	100.00
Group Non-Single Premium	12558.03	8039.30	-35.98	181178.53	137645.82	-24.03	100.00
Group Yearly Renewable Premium	195024.12	227851.06	16.83	1536202.24	2002912.06	30.38	100.00

Data Source: IRDAI

When it comes to sum assured, private insurers clearly have an edge in terms of market share at 84.37%. LIC is building on its term policy sales, but it still has a long way to catch up on sum assured rankings due to its focus on endowments and cash backs. The good news is that, LIC saw its sum assured for FY23 grow by 5.88% yoy, although private insurers grew by a much healthier 20.01%.

How private life insurers delivered in December 2022 

In November 2022, the number of private insurers had reduced from 23 to 22, as Exide Life merged into HDFC Life. Out of these private players, the top 8 insurers in the order of December 2022 premium collections were SBI Life, HDFC Life, ICICI Prudential Life, Canara HSBC, Max Life, Bajaj Allianz, Tata AIA Life and Kotak Life. These 8 players accounted for 85.6% of premium collections. This ratio has bounced sharply and could be attributed to the bounce-back in premium income of Canara HSBC Life, Kotak Life, Tata AIA Life and SBI Life. The month of December 2022 has proven that consolidation and a clearer marketing strategy and positioning is helping private insures give LIC a run for its money.