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LIC again scores brownie points over private insurers in May 2024

12 Jun 2024 , 10:15 AM

LIC DOES BETTER IN A ROBUST MAY 2024

The Life Insurance Council has just released the full month data stack in terms of new business premium (NBP) collections for May 2024. The Council not only discloses data on monthly NBP, but also on monthly policies sold as well as cumulative NBP and policies sold in the month compared to the year-ago period. This allows readers to get a 360-degree perspective of how life insurers performed in the month. May 2024 is just the second month of fiscal year FY25 (Apr-May 2024), hence the YTD data is not too reflective of what could be the full year trend. It only becomes meaningful after about 4-5 months of data are factored into the calculations. The story is that; once again LIC takes the cake in May 2024.

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, as a whole. Apart from the monthly numbers and yoy comparison, the data of cumulative performance of private insurers and LIC for fiscal year FY25 is also provided. While the LIC has done distinctly better in terms of new business premium (NBP) growth on a yoy basis in May 2024, it is the private insurers that have an edge in terms of the number of policies sold. LIC appears to have got over the setback of the new tax regime (NTR) and has started looking at life insurance as a financial planning tool.

LIC AGAIN RULES THE NBP GROWTH STORY IN MAY 2024

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

PARTICULARS NBP
(May-2024)
NBP
(May-2023)
Growth YOY (%)
May-24 / May-23
Growth YOY (%)
FY24 / FY23
Individual Single Premium 3,350.77 2,832.33 18.30% 21.49%
Individual Non Single Premium 6,916.67 5,826.50 18.71% 20.14%
Group Single Premium 15,976.07 13,690.39 16.70% 47.09%
Group Non Single Premium 102.19 381.54 -73.22% -67.88%
Group Yearly Renewable Premium 688.45 747.04 -7.84% -15.78%
Grand Total Premium Flows 27,034.15 23,477.80 15.15% 31.21%
PRIVATE INSURANCE COMPANIES        
Individual Single Premium 1,528.24 1,329.66 14.93% 14.54%
Individual Non Single Premium 4,681.07 3,721.63 25.78% 25.47%
Group Single Premium 3,497.31 3,635.37 -3.80% 5.76%
Group Non Single Premium 11.69 5.03 132.41% 109.07%
Group Yearly Renewable Premium 625.44 729.83 -14.30% -22.03%
Private Insurer Premium Flows 10,343.75 9,421.51 9.79% 12.62%
LIC OF INDIA        
Individual Single Premium 1,822.53 1,502.68 21.29% 28.00%
Individual Non Single Premium 2,235.60 2,104.87 6.21% 10.59%
Group Single Premium 12,478.75 10,055.02 24.10% 65.96%
Group Non Single Premium 90.50 376.51 -75.96% -70.47%
Group Yearly Renewable Premium 63.01 17.21 266.12% 156.73%
LIC Premium Flows 16,690.39 14,056.29 18.74% 46.35%

Data Source: Life Insurance Council (New Business Premiums – NBP figures are ₹ in Crore)

What do we read from the data on insurance business for May 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 15.15% in May 2024. This is despite an elevated base in the comparable month of May 2023; which can be attributed to the genuine efforts by the insurance industry to push insurance as a standalone product. With the new tax regime (NTR) doing away with exemptions like Section 80C, which covers life insurance premiums, the scope for pushing LIC as a tax saving product is diminishing. The market for life insurance is still there. However, the low hanging fruit of pushing insurance for year-end tax savings is gradually diminishing. The undertone of the last few months (since December 2023) has shifted in favour of LIC and the trend has continued in May 2024 also. The private insurers saw NBP expand by just 9.79% in terms of first year premium collections in May 2024 while LIC saw first year premium collections expand by a more impressive 18.74% yoy. This is in contrast to the trend through most of last year, when LIC was continuously witnessing NBP contraction on a yoy basis. The cumulative numbers for the 2 months of FY25 also depict a similar trend.
  • If you look at the overall premium collections for the month of May 2024 at ₹27,034 Crore, the contributions of LIC has improved compared to the private insurers. For instance, private insurers accounted for38.26% share in May 2024; compared to 38.87% in April 2024, 39.71% in March 2024, 41.33% in February 2024, and 43.62% in January 2024. In contrast, LIC accounted for 61.74% in May 2023; against 61.13% in April 2024, 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. Consequently, the NBP share of the private insurers has been gradually eroding.

What has LIC done differently in the current year? The single-minded focus of LIC on improving its NBP appears to have worked well in the last 4 months; even though it means that LIC is trailing the private insurers in terms of number of policies sold. It remains to be seen, how much more NBP share the LIC can eke out of the private insurers.

LIC LAGS PRIVATE INSURERS IN POLICIES SOLD IN MAY 2024

If NBC is about how much fresh money comes into the company, the number of policies are about how much you are investing in future customers. NBP is about deepening the wallet share while number of policies is about widening the wallet base. Having seen the NBP story in elaborate detail, let us shift to the story of number of policies sold by life insurers in May 2024, compared to May 2023. The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of May 2024 in terms of growth in the number of policies; compared to the base of May 2023.

PARTICULARS Policies
(May-2024)
Policies
(May-2023)
Growth YOY (%)
May-24 / May-23
Growth YOY (%)
FY24 / FY23
Individual Single Premium 93,441 74,812 24.90% 22.46%
Individual Non Single Premium 17,71,631 15,84,073 11.84% 11.20%
Group Single Premium 203 135 50.37% 58.01%
Group Non Single Premium 357 373 -4.29% -0.16%
Group Yearly Renewable Premium 2,464 1,931 27.60% 22.61%
Grand Total No. of Policies 18,68,096 16,61,324 12.45% 11.72%
PRIVATE INSURANCE COMPANIES        
Individual Single Premium 20,928 17,235 21.43% 22.89%
Individual Non Single Premium 5,95,352 5,10,638 16.59% 15.17%
Group Single Premium 153 110 39.09% 42.49%
Group Non Single Premium 10 10 0.00% 5.26%
Group Yearly Renewable Premium 582 568 2.46% 4.39%
Private Insurer No. of Policies 6,17,025 5,28,561 16.74% 15.44%
LIC OF INDIA        
Individual Single Premium 72,513 57,577 25.94% 22.30%
Individual Non Single Premium 11,76,279 10,73,435 9.58% 9.23%
Group Single Premium 50 25 100.00% 136.84%
Group Non Single Premium 347 363 -4.41% -0.33%
Group Yearly Renewable Premium 1,882 1,363 38.08% 31.32%
LIC No. of Policies 12,51,071 11,32,763 10.44% 9.90%

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

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

  • The overall insurance sector saw yoy growth in number of policies sold at 12.45% yoy for May 2024. There was a dichotomy, once again. Private insures saw growth of 16.74% in number of policies sold in April 2024 while LIC saw number of policies sold grow by 9.90%. One must admit that this gap has substantially narrowed in the last few months. If you look at the cumulative data for the 2 months of FY25, the trend is still the same with private life insurers leading the number of policies game.
  • If you look at the overall number of policies sold for May 2024 at 18.68 Lakh policies, the contributions of LIC and private insurers are still far off. However, private insurers saw their share of number of policies taper to 33.03% in May 2024; compared to 35.17% in April 2024, 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 at 66.97% in May 2024; compared to 64.83% in April 2024, 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 May 2024.

NBP TRENDS OF KEY PRIVATE LIFE INSURERS IN MAY 2024?

In the month of May 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 71.4% of the total NBP collected by private insurers in May 2024. Let us begin with SBI Life Insurance.

SBI LIFE INSURANCE COMPANY May-24 NBP
(₹ in Crore)
May-23 NBP
(₹ in Crore)
YOY Growth
(in %)
Individual Single Premium 618.04 527.56 17.15%
Individual Non Single Premium 1,072.51 856.46 25.23%
Group Single Premium 647.74 1,009.65 -35.85%
Group Non Single Premium 0.25 3.20 -92.19%
Group Yearly Renewable Premium 15.79 17.26 -8.52%
Total 2,354.33 2,414.13 -2.48%

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

With NBP of ₹2,354.33 Crore in May 2024, SBI Life Insurance saw -2.48% yoy contraction in May 2024. The significant growth of 25.2% came from individual non-single premium policies followed by individual single premium policy NBP growing at 17.2%. The group non-single category witnessed contraction of -92.2% in May 2024 while group single premium contracted by -35.9% in May 2024. Let us turn to HDFC Life Insurance.

HDFC LIFE INSURANCE COMPANY May-24 NBP
(₹ in Crore)
May-23 NBP
(₹ in Crore)
YOY Growth
(in %)
Individual Single Premium 287.00 263.70 8.84%
Individual Non Single Premium 776.63 627.52 23.76%
Group Single Premium 1,177.86 1,042.13 13.02%
Group Non Single Premium 0.00 0.00 N.A.
Group Yearly Renewable Premium 29.40 59.05 -50.21%
Total 2,270.88 1,992.40 13.98%

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

With NBP of ₹2,270.88 Crore in May 2024, HDFC Life Insurance has seen robust 13.98% growth in new business premium yoy. The significant growth of 23.8% came from individual non-single premium policies followed by group single premium policies at 13.0%. The group yearly renewable category witnessed contraction of -50.2% in May 2024. Let us shift to ICICI Prudential Life Insurance.

ICICI PRUDENTIAL LIFE INSURANCE May-24 NBP
(₹ in Crore)
May-23 NBP
(₹ in Crore)
YOY Growth
(in %)
Individual Single Premium 123.42 122.21 0.99%
Individual Non Single Premium 529.87 333.42 58.92%
Group Single Premium 440.69 330.05 33.52%
Group Non Single Premium 0.00 0.00 N.A.
Group Yearly Renewable Premium 223.77 207.84 7.66%
Total 1,317.75 993.52 32.63%

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

With NBP of ₹1,317.75 Crore in May 2024, ICICI Prudential Life Insurance has seen robust 32.63% growth in new business premium yoy. The significant growth of 58.9% came from Individual non-single premium policies followed by Group single premium policies NBP growing at 33.5%. The growth in other categories were relatively tepid for ICICI Pru Life. Let us now move to Bajaj Allianz Life Insurance.

BAJAJ ALLIANZ LIFE INSURANCE May-24 NBP
(₹ in Crore)
May-23 NBP
(₹ in Crore)
YOY Growth
(in %)
Individual Single Premium 45.80 36.33 26.07%
Individual Non Single Premium 410.97 347.17 18.38%
Group Single Premium 235.49 211.89 11.14%
Group Non Single Premium 0.00 0.00 N.A.
Group Yearly Renewable Premium 76.13 123.49 -38.35%
Total 768.39 718.87 6.89%

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

With NBP of ₹768.39 Crore in May 2024, Bajaj Allianz Life Insurance has seen 6.89% growth in new business premium yoy. The significant growth of 26.1% came from Individual single premium policies followed by individual non-single premium and group single premium policies. Bajaj Allianz saw -38.4% contraction in group yearly renewable premium policies. Let us finally look at Max Life Insurance.

MAX LIFE INSURANCE COMPANY May-24 NBP
(₹ in Crore)
May-23 NBP
(₹ in Crore)
YOY Growth
(in %)
Individual Single Premium 157.15 141.02 11.44%
Individual Non Single Premium 400.03 304.28 31.47%
Group Single Premium 109.17 80.15 36.21%
Group Non Single Premium 0.00 0.00 N.A.
Group Yearly Renewable Premium 7.54 21.29 -64.58%
Total 673.88 546.74 23.25%

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

With NBP of ₹673.88 Crore in May 2024, Max Life Insurance has seen robust 23.3% growth in new business premium yoy. The significant growth of 36.2% came from Group single premium policies followed by Individual non-single premium policies at 31.47% growth. Group yearly renewable premium policies contracted yoy by -64.6% for Max Life.

The big story of May 2024 is that LIC has consolidated its leadership position and has taken market share back from the private insurers in terms of new business premium (NBP). That is also showing in the stock price performance of LIC.

Related Tags

  • Insurance
  • IRDA
  • LIC
  • LifeInsurance
  • LifeInsuranceCorp
  • PrivateInsurers
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