How life insurance business performed in June 2023?

12 Jul 2023 , 10:12 AM

This report by IRDAI encompasses data on first year premium collections, number of policies sold and total sum assured. The macro comparison that IRDA offers on a monthly basis gives a quick insight into the monthly performance of life insurers as well as the year-to-date (YTD) performance of the insurance business. It covers LIC and the private insurers separately, but also gives consolidated view.

In terms of first year premium, LIC bucked the trend of the last few months and jumped from negative growth to positive growth. However, the cumulative number of policies sold by LIC was still lower on a yoy basis. For the month of June 2023, the overall growth in first year premiums was much higher at 20.96% compared to private life insurers growing at 13.01%. For FY24 YTD, the weak LIC numbers pulled overall growth to negative zone.

What we read from the First year premium numbers of June 2023

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of June 2023 and for FY24 to date, based on first year premiums.

Insurer	FIRST YEAR PREMIUM
Jun-22	Jun-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	10,610.89	11,990.91	13.01	25,473.53	28,167.64	10.58	38.58
Individual Single Premium	1,418.05	1,558.29	9.89	3,594.26	3,919.16	9.04	46.18
Individual Non-Single Premium	4,189.31	4,704.77	12.30	10,380.59	11,202.55	7.92	65.61
Group Single Premium	4,356.06	4,787.01	9.89	9,321.71	10,700.39	14.79	24.23
Group Non-Single Premium	12.49	6.16	-50.65	39.02	16.63	-57.38	1.95
Group Yearly Renewable Premium	634.98	934.68	47.20	2,137.94	2,328.92	8.93	96.03
LIC of India	20,643.67	24,970.82	20.96	48,201.00	44,837.20	-6.98	61.42
Individual Single Premium	1,705.56	2,051.11	20.26	4,633.24	4,568.25	-1.40	53.82
Individual Non-Single Premium	2,583.27	2,243.51	-13.15	6,283.43	5,870.93	-6.56	34.39
Group Single Premium	16,068.57	20,510.91	27.65	36,143.86	33,465.56	-7.41	75.77
Group Non-Single Premium	253.88	119.67	-52.86	1,051.36	836.26	-20.46	98.05
Group Yearly Renewable Premium	32.38	45.63	40.91	89.11	96.20	7.96	3.97
Grand Total	31,254.55	36,961.73	18.26	73,674.53	73,004.85	-0.91	100.00
Individual Single Premium	3,123.60	3,609.40	15.55	8,227.51	8,487.41	3.16	100.00
Individual Non-Single Premium	6,772.58	6,948.27	2.59	16,664.03	17,073.47	2.46	100.00
Group Single Premium	20,424.64	25,297.92	23.86	45,465.57	44,165.95	-2.86	100.00
Group Non-Single Premium	266.37	125.83	-52.76	1,090.38	852.89	-21.78	100.00
Group Yearly Renewable Premium	667.36	980.31	46.89	2,227.05	2,425.12	8.89	100.00

Data Source: IRDAI

Even a cursory glance at the above table would tell us that LIC has bounced back in June 2023 in terms of first year premiums while the private players have grown at a slower clip compared to LIC. Here are some of the key takeaways from the table above.

• For the month of June 2023, first year premium collections overall increased by 18.26% to Rs36,962 crore. However, respective performances diverged. LIC reported 20.96% growth in first year premiums for June at Rs24,971 crore while private life insurers saw 13.01% growth in first year premium collections for June 2023 at Rs11,991 crore. 

   

• Let us turn to the cumulative picture for the first 3 months of FY24. Overall, first year premium collections for the industry contracted by a marginal -0.91% over the corresponding period last year. Here again there is divergence. While LIC saw cumulative first year premiums for FY24 contract by -6.98%, private players saw the number expand by 10.58%.

   

• What were the positive and negative growth drivers for the insurance industry. For June 2023, individual single premium policies, individual non-single premium policies, group single and group renewable policies showed growth while only the group non-single premium policies saw contraction in June. For LIC, Individual single, group single and group yearly renewable premium policies showed positive growth. In the case of private insurers only group non-single premium policies saw contraction with the other 4 showing expansion in premiums.

   

• How does that leave the cumulative market share of LIC and the private insurers for FY24 so far? In terms of share of cumulative first year premiums, LIC share stands at 61.42% while private insurers have a share of 38.58% for the first 3 months of FY24. LIC has definitely shown an improvement in June over May 2023.

The change to the new tax regime appears to have take away some sheen from LIC business performance, but after the surprise of April and May, LIC has shown recovery in June 2023.

What we read from number of policies sold in June 2023?

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of June 2023 and for FY24 to date, based on number of policies sold.

Insurer	NO. OF POLICIES / SCHEMES
Jun-22	Jun-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	6,05,821	6,38,430	5.38	15,16,193	15,75,369	3.90	32.83
Individual Single Premium	19,848	20,499	3.28	55,762	54,160	-2.87	23.98
Individual Non-Single Premium	5,85,505	6,17,289	5.43	14,59,303	15,19,261	4.11	33.29
Group Single Premium	104	121	16.35	227	315	38.77	83.11
Group Non-Single Premium	17	8	-52.94	54	27	-50.00	2.76
Group Yearly Renewable Premium	347	513	47.84	847	1,606	89.61	23.46
LIC of India	15,27,002	13,05,098	-14.53	36,87,386	32,22,557	-12.61	67.17
Individual Single Premium	77,200	76,734	-0.60	1,94,292	1,71,663	-11.65	76.02
Individual Non-Single Premium	14,47,267	12,25,046	-15.35	34,87,472	30,44,638	-12.70	66.71
Group Single Premium	143	26	-81.82	307	64	-79.15	16.89
Group Non-Single Premium	499	339	-32.06	1,246	953	-23.52	97.24
Group Yearly Renewable Premium	1,893	2,953	56.00	4,069	5,239	28.75	76.54
Grand Total	21,32,823	19,43,528	-8.88	52,03,579	47,97,926	-7.80	100.00
Individual Single Premium	97,048	97,233	0.19	2,50,054	2,25,823	-9.69	100.00
Individual Non-Single Premium	20,32,772	18,42,335	-9.37	49,46,775	45,63,899	-7.74	100.00
Group Single Premium	247	147	-40.49	534	379	-29.03	100.00
Group Non-Single Premium	516	347	-32.75	1,300	980	-24.62	100.00
Group Yearly Renewable Premium	2,240	3,466	54.73	4,916	6,845	39.24	100.00

Data Source: IRDAI

What did we read from the IRDAI data on policies sold by LIC and the private players? Here are some key takeaways.

• Overall number of policies showed an -8.88% contraction for life insurers overall. However, the divergence was visible here also. While LIC saw -14.53% contraction in number of policies sold in June 2023, private insurers have seen 5.38% growth. That trend is approximately replicated even if you look at the cumulative trend for FY24, although the growth of private insurers is relatively muted.

   

• How does market share look like for LIC versus private players in FY24 (April to June)? Here LIC still has a 67.17% market share with private players taking away the balance 32.83% market share. For now, it looks like the feet on street sales force is doing a good job for LIC in terms of the market share in number of policies sold. However, the NTR (new tax regime) appears to have taken a toll on policy accretion numbers for LIC.

LIC has maintained a semblance of dominance in number of policies, but the pressure of the tax shift is clearly showing on the monthly numbers of LIC.

What we read from the sum assured data for June 2023

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of June 2023 and for FY24 to date, based on total sum assured.

Insurer	SUM ASSURED
Jun-22	Jun-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	4,39,119	6,61,850	50.72	11,92,681	18,19,106	52.52	91.83
Individual Single Premium	1,603	1,359	-15.20	4,156	3,373	-18.85	56.09
Individual Non-Single Premium	1,07,852	1,39,890	29.71	2,84,034	3,62,448	27.61	78.76
Group Single Premium	1,11,824	2,63,885	135.98	3,05,489	5,11,434	67.41	99.96
Group Non-Single Premium	14,150	5,641	-60.14	30,248	18,813	-37.81	74.09
Group Yearly Renewable Premium	2,03,690	3,12,426	53.38	5,68,753	9,23,038	62.29	94.41
LIC of India	91,689	60,210	-34.33	2,06,553	1,61,797	-21.67	8.17
Individual Single Premium	1,384	1,206	-12.91	3,442	2,640	-23.29	43.91
Individual Non-Single Premium	47,963	38,810	-19.08	1,16,491	97,760	-16.08	21.24
Group Single Premium	104	75	-27.70	233	189	-18.78	0.04
Group Non-Single Premium	2,117	2,379	12.38	4,854	6,578	35.51	25.91
Group Yearly Renewable Premium	40,120	17,740	-55.78	81,533	54,629	-33.00	5.59
Grand Total	5,30,808	7,22,060	36.03	13,99,234	19,80,902	41.57	100.00
Individual Single Premium	2,987	2,565	-14.14	7,598	6,013	-20.86	100.00
Individual Non-Single Premium	1,55,816	1,78,700	14.69	4,00,526	4,60,208	14.90	100.00
Group Single Premium	1,11,928	2,63,960	135.83	3,05,722	5,11,623	67.35	100.00
Group Non-Single Premium	16,267	8,020	-50.70	35,103	25,391	-27.67	100.00
Group Yearly Renewable Premium	2,43,810	3,30,166	35.42	6,50,286	9,77,667	50.34	100.00

Data Source: IRDAI

Here are some of our major takeaways from the sum assured data for June 2023 for the private insurers and for the LIC.

• Private sector has always dominated the sum assured space due to their focus on term policies and less on endowments. Hence their ratio of sum assured to premiums has always been higher. Sum Assured for June 2023 was up 36.3% for the industry as a whole. However, while private insurers grew sum assured by 50.72%, LIC saw contraction in sum assured of -34.33% yoy.

   

• In terms of market share for FY24, private sector takes 91.83% share of sum assured while LIC gets just 8.17% share, for quite obvious reasons of the nature of sales push.

The June numbers surely leaves LIC with a lot of food for thought. It has done better in June 2023, but the pressure of the shift to NTR is still showing on LIC numbers. This is also likely to reflect on the stock price of LIC.