LIC drives new business premium growth in February 2024

10 Mar 2024 , 07:47 AM

LIC leads the NBP growth narrative in February 2024

The Life Insurance Council has just released the full month data stack in terms of new business premium (NBP) collections for February 2024. Apart from the NBP data, the Life Insurance Council has also released data on the number of policies sold by individual insurance companies and also at a macro level. In addition to monthly numbers and the yoy comparison, the data also provides cumulative performance of the private insurers and the LIC for the first 11 months of FY24 upto the end of February 2024. While the monthly data captures the high frequency story of insurance business flows, the cumulative data captures the secular trend. For the latest month to February 2024, it is LIC that has led the growth in new business premiums (NBP), largely led by aggressive selling by its feet-on-street force.

There appear to be a clear recovery story scripted by LIC. In the first 8 months of FY24 (up to November 2023), the new business premiums gravitated towards the private insurers. However, since December 2023, the trend appears to have shifted back in favour of LIC and that trend has only got accentuated in the month of February 2024. If you compare the first 11 months of FY24 with the first 11 months of FY23, the LIC share of new business premiums (NBP) has stayed robust at above 58.6%, thanks to the turnaround since December 2023. However, it is still sharply lower from the year ago  level of 63.8% of NBP which LIC had managed to corner. A clearer high frequency picture emerges if you look at the NBP (new business premium) figure for February 2024 at 58.67%, higher than 56.38% in January 2024 and  sharply higher than the corresponding February 2023 NBP share for LIC of a mere 51.99%. FY24 will go down as the year when LIC scripted a smart recovery in the second half of the year, from December 2023 onwards.

New Business Premium (NBP) Growth for February 2024

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

PARTICULARS	Premium Flows (Feb-2024)	Premium Flows (Feb-2023)	Growth in NBP YOY (%)
Individual Single Premium	3,971.32	3,439.37	15.47%
Individual Non Single Premium	9,383.16	7,938.30	18.20%
Group Single Premium	19,320.28	10,508.51	83.85%
Group Non Single Premium	276.63	361.32	-23.44%
Group Yearly Renewable Premium	961.80	600.14	60.26%
Grand Total Premium Flows	33,913.18	22,847.65	48.43%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	1,889.45	1,533.82	23.19%
Individual Non Single Premium	6,574.59	5,465.19	20.30%
Group Single Premium	4,658.96	3,416.35	36.37%
Group Non Single Premium	22.96	19.22	19.46%
Group Yearly Renewable Premium	871.21	533.57	63.28%
Private Insurer Premium Flows	14,017.17	10,968.16	27.80%
LIC OF INDIA
Individual Single Premium	2,081.86	1,905.56	9.25%
Individual Non Single Premium	2,808.58	2,473.10	13.57%
Group Single Premium	14,661.31	7,092.17	106.73%
Group Non Single Premium	253.67	342.10	-25.85%
Group Yearly Renewable Premium	90.59	66.56	36.10%
LIC Premium Flows	19,896.01	11,879.49	67.48%

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

Here are some quick takeaways from the data points on insurance business for January 2024 in terms of the first year premium collections by insurance companies.

• The overall insurance sector saw sharp yoy growth in first year premiums by 48.43% in February 2024. This can be attributed to a relatively low base in February 2023 and also to genuine efforts put by the insurance company to push insurance as a standalone product, rather than as a tax-saving tool. However, the dichotomy of the last few months (since December 2023) has shifted in favour of LIC and the trend is broadly visible in February 2024 also. The private insurers saw NBP expand by 27.80% in terms of first year premium collections in February 2024 while LIC saw first year premium collections expand by a whopping 67.48% yoy; a sharp contrast to the contraction in NBP collections in the first half of FY24.
• If you look at the overall premium collections for the month of February 2024 at ₹33,913 Crore, the contributions of LIC and private insurers have been stable. Private insurers accounted for 41.33% in February compared to 43.62% in January 2024. In contrast, LIC accounted for 58.67% of total premiums in February 2024, compared to 56.38% in January 2024. Clearly, the February 2024 story has been largely scripted and dominated by LIC, as compared to the private insurers.

There has been some consolation for LIC since December 2023, in terms of NBP share, although the ball is still in LIC’s court to consolidate on these gains, going ahead.

First year Premium Growth for FY24 (Apr-23 to Feb-24)

The table below captures the performance of LIC, private insurers and the overall insurance sector for the first 11 months of FY24 (April 2023 to February 2024), in terms of cumulative new business premium (NBP). The comparison is with the comparable 11 months for FY23.

PARTICULARS	Premium Flows (FY24)	Premium Flows (FY23)	Growth in NBP YOY (%)
Individual Single Premium	38,753.96	38,539.33	0.56%
Individual Non Single Premium	87,443.01	79,736.08	9.67%
Group Single Premium	1,78,131.98	1,86,887.35	-4.68%
Group Non Single Premium	3,949.09	4,855.53	-18.67%
Group Yearly Renewable Premium	9,468.68	8,443.61	12.14%
Grand Total Premium Flows	3,17,746.71	3,18,461.90	-0.22%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	17,749.75	17,193.67	3.23%
Individual Non Single Premium	59,898.98	52,798.61	13.45%
Group Single Premium	45,853.52	37,401.53	22.60%
Group Non Single Premium	130.76	135.01	-3.15%
Group Yearly Renewable Premium	7,891.33	7,750.14	1.82%
Private Insurer Premium Flows	1,31,524.34	1,15,278.96	14.09%
LIC OF INDIA
Individual Single Premium	21,004.21	21,345.65	-1.60%
Individual Non Single Premium	27,544.03	26,937.48	2.25%
Group Single Premium	1,32,278.47	1,49,485.82	-11.51%
Group Non Single Premium	3,818.32	4,720.52	-19.11%
Group Yearly Renewable Premium	1,577.35	693.47	127.46%
LIC Premium Flows	1,86,222.37	2,03,182.93	-8.35%

Data Source: Life Insurance Council (Premium figures are ₹ in Crore and for period Apr-23 to Feb-24)

Here are some quick takeaways from the data points on insurance for FY24 (Apr-Jan) in terms of cumulative first year premium collections by insurance companies.

• The insurance sector saw contraction in first year premium collections marginally lower at -0.22% for FY24 (Apr-Feb) on yoy basis. Apparently, the lag effect of earlier months still stays. The private insurers saw NBP growth of 14.09% for first 11 months, compared to contraction of -8.35% for LIC in FY24. First half of FY24 is still an overhang for LIC.
• If you look at the overall premium collections for the period of FY24 (Apr-Jan) at ₹3,17,747 Crore, the respective contributions of LIC and private insurers are almost flat as the end of FY24. Private insurers accounted for 41.39% while LIC accounted for 58.61%; exactly same as last month. However, if you look at the year ago share, LIC share was at 63.80%, while private insurers stood at 36.20% in that period. It must be said that if LIC continues to consolidated on its growth story, then the next few months could see a distinct shift in favour of LIC in the insurance sweepstakes.

Growth in Number of Policies for February 2024

The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of February 2024 in terms of growth in the number of policies. The comparison is, once again, between February 2024 and February 2023.

PARTICULARS	No. of Policies (Feb-2024)	No. of Policies (Feb-2023)	Growth in Policies YOY (%)
Individual Single Premium	1,06,618	96,041	11.01%
Individual Non Single Premium	23,85,481	21,85,963	9.13%
Group Single Premium	172	126	36.51%
Group Non Single Premium	439	483	-9.11%
Group Yearly Renewable Premium	3,109	2,916	6.62%
Grand Total No. of Policies	24,95,819	22,85,529	9.20%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	32,646	25,475	28.15%
Individual Non Single Premium	7,43,986	6,43,351	15.64%
Group Single Premium	138	107	28.97%
Group Non Single Premium	19	11	72.73%
Group Yearly Renewable Premium	470	537	-12.48%
Private Insurer No. of Policies	7,77,259	6,69,481	16.10%
LIC OF INDIA
Individual Single Premium	73,972	70,566	4.83%
Individual Non Single Premium	16,41,495	15,42,612	6.41%
Group Single Premium	34	19	78.95%
Group Non Single Premium	420	472	-11.02%
Group Yearly Renewable Premium	2,639	2,379	10.93%
LIC No. of Policies	17,18,560	16,16,048	6.34%

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

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

• The overall insurance sector saw yoy growth in number of policies sold at 9.20% for February 2024. There was a dichotomy, once again. Private insures saw growth of 16.10% in number of policies sold in February 2024 while LIC saw number of policies sold grow by just 6.34%. Normally, LIC had managed to show growth in number of policies sold in the past, but focus has perhaps shifted to NBP in recent months, which is right.
• If you look at the overall number of policies sold for February 2024 at 24.96 Lakh policies, the contributions of LIC and private insurers are still far off. However, private insurers saw their share of number of policies sold bounce sharply from 27.36% in January 2024 to 31.14% in February 2024. In contrast, LIC saw its share of number of policies taper from 72.64% in January 22024 to 68.86% in February 2024. However, it is still higher than the first half of FY24 average of 65%. It is in individual policy numbers that LIC is really making a dent on the share of private insurers.

Growth in number of policies for FY24 (Apr-23 to Feb-24)

The table below captures the cumulative performance of LIC, private insurers and the overall insurance sector for FY24 (Apr-23 to Feb-24) based on the number of policies sold.

PARTICULARS	No. of Policies (FY24)	No. of Policies (FY23)	Growth in Policies YOY (%)
Individual Single Premium	10,35,400	10,73,745	-3.57%
Individual Non Single Premium	2,27,29,512	2,21,03,506	2.83%
Group Single Premium	2,204	1,671	31.90%
Group Non Single Premium	3,819	5,170	-26.13%
Group Yearly Renewable Premium	33,162	30,655	8.18%
Grand Total No. of Policies	2,38,04,097	2,32,14,747	2.54%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	2,45,875	2,34,493	4.85%
Individual Non Single Premium	72,21,724	65,66,423	9.98%
Group Single Premium	1,623	993	63.44%
Group Non Single Premium	86	213	-59.62%
Group Yearly Renewable Premium	5,443	3,976	36.90%
Private Insurer No. of Policies	74,74,751	68,06,098	9.82%
LIC OF INDIA
Individual Single Premium	7,89,525	8,39,252	-5.93%
Individual Non Single Premium	1,55,07,788	1,55,37,083	-0.19%
Group Single Premium	581	678	-14.31%
Group Non Single Premium	3,733	4,957	-24.69%
Group Yearly Renewable Premium	27,719	26,679	3.90%
LIC No. of Policies	1,63,29,346	1,64,08,649	-0.48%

Data Source: Life Insurance Council (Cumulative Data from Apr-23 to Feb-24)

Here are some quick takeaways from the data points on insurance for FY24 (Apr-Feb) in terms of the number of policies sold.

• The overall insurance sector saw modest growth in terms of number of policies sold by 2.54% for FY24 (Apr-Feb) compared to the year ago period. However, there was a dichotomy once again. The private insures saw growth of 9.82% in terms of number of policies sold in FY24, while LIC saw number of policies sold contract by -0.48% in the same period.
• If you look at the overall number of policies sold for FY24 (Apr-Feb) at 238.04 Lakh policies, the contributions of LIC and private insurers are still far off. Private insurers accounted for 31.40%, higher than 29.32% in the year ago period. LIC saw its share flat at 68.60% in FY24 compared to 70.68% in FY23. However, compared to the January 2024 update, the numbers for private insurers and for LIC are almost flat.

LIC is getting adjusted to the new insurance order

It looks like the LIC is finally getting over its obsession with Section 80C benefits to sell its life insurance products. That was the paradigm for over 65 years, but now that is changing. One reason is that private insurers are eating into the LIC market share. Things did appear to move against the LIC after the introduction of the new tax regime (NTR) last year. However, LIC seems to have got its act together post-November 2023, with tangible growth in NBP and in number of policies sold. Not surprisingly, the stock of LIC has more than doubled from the lows of last year and it is finally decisively above the IPO issue price.