How life insurance business performed in May 2023

11 Jun 2023 , 09:12 AM

This pertains to data on first year premium collections, the number of policies sold and the total sum assured. The macro comparison that IRDA offers on a monthly basis gives a quick insight into how life insurers performed in the previous month as well as on a cumulative basis for the fiscal year to date.

One trend that has been visible in first  year premiums is that LIC has been seeing contraction in premiums yoy while private players are still managing to hold on to positive growth. However, doe to the predominant position of LIC, the overall industry level data has been relatively weak. Let us look at the performance of May 2023 across first year premiums, number of policies sold and the total sum assured.

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

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

Insurer	FIRST YEAR PREMIUM
May-22	May-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	8,639.72	9,421.51	9.05	14,862.64	16,176.72	8.84	44.88
Individual Single Premium	1,176.57	1,329.66	13.01	2,176.22	2,360.86	8.48	48.40
Individual Non-Single Premium	3,375.20	3,721.63	10.26	6,191.28	6,497.78	4.95	64.17
Group Single Premium	2,985.43	3,635.37	21.77	4,965.65	5,911.98	19.06	31.34
Group Non-Single Premium	15.55	5.03	-67.66	26.53	10.47	-60.55	1.44
Group Yearly Renewable Premium	1,086.97	729.83	-32.86	1,502.96	1,395.64	-7.14	96.50
LIC of India	15,840.63	14,056.29	-11.26	27,557.34	19,866.39	-27.91	55.12
Individual Single Premium	1,608.95	1,502.68	-6.61	2,927.69	2,517.14	-14.02	51.60
Individual Non-Single Premium	2,127.22	2,104.87	-1.05	3,700.16	3,627.42	-1.97	35.83
Group Single Premium	11,607.85	10,055.02	-13.38	20,075.29	12,954.65	-35.47	68.66
Group Non-Single Premium	481.97	376.51	-21.88	797.47	716.59	-10.14	98.56
Group Yearly Renewable Premium	14.64	17.21	17.55	56.73	50.57	-10.85	3.50
Grand Total	24,480.36	23,477.80	-4.10	42,419.97	36,043.11	-15.03	100.00
Individual Single Premium	2,785.53	2,832.33	1.68	5,103.90	4,878.01	-4.43	100.00
Individual Non-Single Premium	5,502.42	5,826.50	5.89	9,891.44	10,125.20	2.36	100.00
Group Single Premium	14,593.28	13,690.39	-6.19	25,040.93	18,866.63	-24.66	100.00
Group Non-Single Premium	497.52	381.54	-23.31	824.00	727.06	-11.76	100.00
Group Yearly Renewable Premium	1,101.61	747.04	-32.19	1,559.69	1,446.21	-7.28	100.00

Data Source: IRDAI

Even a cursory glance at the above table would tell us that LIC has been struggling in May 2023 in terms of first year premiums while the private players are still managing to show positive growth on a yoy basis. Here are some of the key takeaways from the table above.

• For the month of May 2023, first year premium collections overall fell by -4.1% to Rs23,478 crore. However, respective performances diverged. LIC an -11.3% contraction in first year premiums for May at Rs14,056 crore while private players saw a 9.1% growth in first year premium collections for May 2023 at Rs9,422 crore. 

   

• Let us turn to the cumulative picture for the first two months of FY24. Overall, first year premium collections for the industry contracted by -15.0% over the corresponding period last year. Here again there is divergence. While LIC saw cumulative first year premiums for FY24 contract by -27.9%, private players saw the number expand by 8.8%.

   

• What were the positive and negative growth drivers for the insurance industry. For May 2023, individual single premium policies and individual non-single premium policies showed positive growth while group single, group non-single and group renewable premiums saw contraction in May compared to the previous year. For LIC, all categories other than group yearly renewable premiums saw contraction. In the case of private insurers only group single and group year renewable premiums saw contraction with the other 3 saw 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 has fallen to 55.1% while private insurers have a share of 44.9% for the first 2 months of FY24.

The change to the new tax regime appears to have take away some sheen from LIC business performance, since insurance is unlikely to be the major driver of tax saving.

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

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

Insurer	NO. OF POLICIES / SCHEMES
May-22	May-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	5,02,415	5,28,561	5.20	9,10,372	9,36,938	2.92	32.82
Individual Single Premium	19,015	17,235	-9.36	35,914	33,661	-6.27	26.18
Individual Non-Single Premium	4,83,067	5,10,638	5.71	8,73,798	9,01,972	3.22	33.14
Group Single Premium	61	111	81.97	123	194	57.72	83.62
Group Non-Single Premium	21	10	-52.38	37	19	-48.65	3.00
Group Yearly Renewable Premium	251	568	126.29	500	1,093	118.60	32.35
LIC of India	12,47,243	11,32,763	-9.18	21,60,384	19,17,459	-11.24	67.18
Individual Single Premium	66,977	57,577	-14.03	1,17,092	94,929	-18.93	73.82
Individual Non-Single Premium	11,78,310	10,73,435	-8.90	20,40,205	18,19,592	-10.81	66.86
Group Single Premium	133	25	-81.20	164	38	-76.83	16.38
Group Non-Single Premium	492	363	-26.22	747	614	-17.80	97.00
Group Yearly Renewable Premium	1,331	1,363	2.40	2,176	2,286	5.06	67.65
Grand Total	17,49,658	16,61,324	-5.05	30,70,756	28,54,397	-7.05	100.00
Individual Single Premium	85,992	74,812	-13.00	1,53,006	1,28,590	-15.96	100.00
Individual Non-Single Premium	16,61,377	15,84,073	-4.65	29,14,003	27,21,564	-6.60	100.00
Group Single Premium	194	136	-29.90	287	232	-19.16	100.00
Group Non-Single Premium	513	373	-27.29	784	633	-19.26	100.00
Group Yearly Renewable Premium	1,582	1,931	22.06	2,676	3,379	26.27	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 a -5.1% contraction for life insurers overall. However, the divergence was visible here also. While LIC saw -9.2% contraction in number of policies sold in May 2023, private insurers have seen 5.2% growth. That trend is approximately replicated even if you look at the cumulative trend for FY24.

   

• How does market share look like for LIC versus private players in FY24 (April and May)? Here LIC still has a 67.2% market share with private players taking away the balance 32.8% market share. For now, it does look like the feet on street is doing a great job for LIC in terms of the number of policies sold, although the NTR (new tax regime) appears to have taken a toll on these numbers too.

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

What we read from the sum assured numbers for May 2023

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

Insurer	SUM ASSURED
May-22	May-23	YOY  (%)	FY23  (YTD)	FY24  (YTD)	YOY  (%)	Market  Share (%)
Private Total	4,25,287	5,35,023	25.80	7,53,564	10,95,905	45.43	91.52
Individual Single Premium	1,340	1,136	-15.20	2,554	2,014	-21.14	58.40
Individual Non-Single Premium	94,014	1,18,497	26.04	1,76,183	2,22,559	26.32	79.06
Group Single Premium	1,04,016	1,27,243	22.33	1,93,665	2,47,491	27.79	99.95
Group Non-Single Premium	8,978	4,316	-51.92	16,098	13,172	-18.17	75.83
Group Yearly Renewable Premium	2,16,939	3,13,933	44.71	3,65,063	6,10,670	67.28	94.30
LIC of India	66,695	49,854	-25.25	1,14,864	1,01,586	-11.56	8.48
Individual Single Premium	1,194	890	-25.46	2,057	1,434	-30.27	41.60
Individual Non-Single Premium	40,258	35,010	-13.04	68,528	58,950	-13.98	20.94
Group Single Premium	93	47	-49.12	130	114	-11.64	0.05
Group Non-Single Premium	1,542	1,724	11.80	2,737	4,199	53.40	24.17
Group Yearly Renewable Premium	23,608	12,184	-48.39	41,412	36,889	-10.92	5.70
Grand Total	4,91,982	5,84,877	18.88	8,68,428	11,97,491	37.89	100.00
Individual Single Premium	2,534	2,027	-20.03	4,611	3,448	-25.22	100.00
Individual Non-Single Premium	1,34,272	1,53,506	14.32	2,44,711	2,81,509	15.04	100.00
Group Single Premium	1,04,109	1,27,291	22.27	1,93,795	2,47,605	27.77	100.00
Group Non-Single Premium	10,520	6,040	-42.58	18,835	17,371	-7.77	100.00
Group Yearly Renewable Premium	2,40,547	3,26,117	35.57	4,06,476	6,47,559	59.31	100.00

Data Source: IRDAI

Here are some of our major takeaways from the sum assured data for May 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 May 2023 was up 18.9% for the industry as a whole. However, while private insurers grew sum assured by 25.8%, LIC saw contraction in sum assured of -25.3% yoy.

   

• In terms of market share for FY24, private sector takes 91.5% share while LIC gets just 8.5% share, for the reason we already discussed in the previous point.

The May numbers surely leaves LIC with serious thinking points, especially in the aftermath of the new tax regime. After all, LIC is now a listed company with a lot of market scrutiny.