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LIC scripts a stellar NBP growth story in March 2024

19 Apr 2024 , 09:43 AM

LIC LORDS OVER PRIVATE INSURERS IN MARCH 2024

The Life Insurance Council has just released the full month data stack in terms of new business premium (NBP) collections for the month of March 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. Apart from the monthly numbers and yoy comparison, the Life Insurance Council also provides cumulative performance of private insurers and LIC for fiscal year FY24. While the monthly data captures high frequency story of insurance NBP flows, the cumulative data captures the broader trend. In March 2024, it was again LIC that stole a march over the private insurers in terms of NBP growth.

HOW LIC SCRIPTED A RECOVERY IN RECENT MONTHS?

It does look like a classic recovery story scripted by LIC. This shift is more pronounced in the last 4 months of FY24. In fact, if you look at the data upto November 2023, the NBP growth actually gravitated towards private insurers. However, since December 2023, the trend has shifted in favour of LIC and that trend has been sustained all the way to March 2024. If you compare fiscal year FY24 with the fiscal year FY23, the LIC share of new business premiums (NBP) has improved by 30 bps to 58.9%, compared to 58.6% between December and February 2023. However, it is still lower than the year ago  level of 62.6% of NBP which LIC had managed to corner. However, the gap is certainly narrowing. A clearer high frequency picture emerges if you look at the NBP (new business premium) share of LIC for March 2024 at 60.29%, compared to just 58.67% and 56.38% respectively in February and January 2024. If you compare the LIC NBP share for March 2024 versus March 2023, it sharply higher compared to just 55.14% in the previous year.

NEW BUSINESS PREMIUM (NBP) GROWTH FOR MARCH 2024

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

PARTICULARS Premium Flows
(Mar-2024)
Premium Flows
(Mar-2023)
Growth in NBP
YOY (%)
Individual Single Premium 6,664.39 6,527.96 2.09%
Individual Non Single Premium 16,990.32 19,713.18 -13.81%
Group Single Premium 34,115.74 24,096.42 41.58%
Group Non Single Premium 590.47 486.70 21.32%
Group Yearly Renewable Premium 1,852.70 1,256.85 47.41%
Grand Total Premium Flows 60,213.62 52,081.12 15.62%
PRIVATE INSURANCE COMPANIES      
Individual Single Premium 2,676.34 2,249.78 18.96%
Individual Non Single Premium 11,929.50 13,635.21 -12.51%
Group Single Premium 7,865.60 6,347.20 23.92%
Group Non Single Premium 41.39 26.37 56.96%
Group Yearly Renewable Premium 1,400.17 1,106.32 26.56%
Private Insurer Premium Flows 23,913.00 23,364.88 2.35%
LIC OF INDIA      
Individual Single Premium 3,988.06 4,278.18 -6.78%
Individual Non Single Premium 5,060.81 6,077.97 -16.74%
Group Single Premium 26,250.14 17,749.22 47.89%
Group Non Single Premium 549.07 460.33 19.28%
Group Yearly Renewable Premium 452.53 150.53 200.62%
LIC Premium Flows 36,300.62 28,716.23 26.41%

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

Here are some quick takeaways from the data points on insurance business for March 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 15.62% in March 2024. This can be attributed to a relatively low base in March 2023 and also to genuine efforts by the insurance company to push insurance as a standalone product, rather than as a tax-saving tool. However, the undertone of the last few months (since December 2023) has shifted in favour of LIC and the trend has continued in March 2024 also. The private insurers saw NBP expand by just 2.35% in terms of first year premium collections in March 2024 while LIC saw first year premium collections expand by an impressive 15.62% yoy; a contrast to NBP contraction in the first half of FY24.
  • If you look at the overall premium collections for the month of March 2024 at ₹60,214 Crore, the contributions of LIC has improved compared to the private insurers. For instance, private insurers accounted for39.71% in March 2024, compared to 41.33% in February, and 43.62% in January 2024. In contrast, LIC accounted for 60.29% in March 2024, compared to 58.67% in February 2024 and 56.38% in January 2024. Clearly, the March 2024 story has again been scripted and dominated by LIC over private insurers.

The sustained focus of LIC on improving its NBP appears to be working in the last 4 months, and that is also largely reflected in the stock price of LIC, which has doubled from the lows.

NEW BUSINESS PREMIUM GROWTH FOR FISCAL YEAR FY24

The table below captures the performance of LIC, private insurers and the overall insurance sector for the full fiscal year FY24 (April 2023 to March 2024), in terms of cumulative new business premium (NBP). It is juxtaposed with the comparable 12 months for FY23.

PARTICULARS Premium Flows
(FY24)
Premium Flows
(FY23)
Growth in NBP
YOY (%)
Individual Single Premium 45,418.35 45,067.29 0.78%
Individual Non Single Premium 1,04,433.32 99,449.27 5.01%
Group Single Premium 2,12,247.73 2,10,983.77 0.60%
Group Non Single Premium 4,539.55 5,342.23 -15.03%
Group Yearly Renewable Premium 11,321.38 9,700.46 16.71%
Grand Total Premium Flows 3,77,960.34 3,70,543.02 2.00%
PRIVATE INSURANCE COMPANIES      
Individual Single Premium 20,426.09 19,443.45 5.05%
Individual Non Single Premium 71,828.48 66,433.82 8.12%
Group Single Premium 53,719.12 43,748.73 22.79%
Group Non Single Premium 172.16 161.38 6.68%
Group Yearly Renewable Premium 9,291.50 8,856.46 4.91%
Private Insurer Premium Flows 1,55,437.34 1,38,643.85 12.11%
LIC OF INDIA      
Individual Single Premium 24,992.27 25,623.83 -2.46%
Individual Non Single Premium 32,604.84 33,015.45 -1.24%
Group Single Premium 1,58,528.61 1,67,235.04 -5.21%
Group Non Single Premium 4,367.40 5,180.85 -15.70%
Group Yearly Renewable Premium 2,029.88 843.99 140.51%
LIC Premium Flows 2,22,522.99 2,31,899.17 -4.04%

Data Source: Life Insurance Council (Premiums are ₹ in Crore for period Apr-23 to Mar-24)

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

  • The insurance sector saw a marginal 2% expansion in first year premiums for the fiscal year FY24. Apparently, the lag effect of earlier months still stays. The private insurers saw NBP growth of 12.11% for fiscal year FY24, compared to contraction of -4.04% for LIC in FY24. First half of FY24 is still acting as an overhang for LIC.
  • If you look at the overall premium collections for fiscal year FY24 (Apr-March) at ₹3,77,960 Crore, the respective contributions of LIC and private insurers are almost flat as the end of FY24. Private insurers accounted for 41.13% while LIC accounted for 58.87%; with LIC share marginally improving over February 2024. However, if you look at the year ago share, LIC share was at 62.58%, while private insurers stood at 37.42% 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 shift in favour of LIC.

GROWTH IN NUMBER OF POLICIES FOR MARCH 2024

Having seen NBP growth, and market share, let us also look at the insurance sector performance in terms of number of policies sold. The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of March 2024 in terms of growth in the number of policies; with yoy comparison.

PARTICULARS No. of Policies
(Mar-2024)
No. of Policies
(Mar-2023)
Growth in Policies
YOY (%)
Individual Single Premium 2,23,424 2,11,084 5.85%
Individual Non Single Premium 51,88,541 50,86,499 2.01%
Group Single Premium 455 265 71.70%
Group Non Single Premium 1,541 1,347 14.40%
Group Yearly Renewable Premium 4,478 3,239 38.25%
Grand Total No. of Policies 54,18,439 53,02,434 2.19%
PRIVATE INSURANCE COMPANIES      
Individual Single Premium 66,047 46,051 43.42%
Individual Non Single Premium 12,50,258 11,98,930 4.28%
Group Single Premium 371 239 55.23%
Group Non Single Premium 23 21 9.52%
Group Yearly Renewable Premium 781 787 -0.76%
Private Insurer No. of Policies 13,17,480 12,46,028 5.73%
LIC OF INDIA      
Individual Single Premium 1,57,377 1,65,033 -4.64%
Individual Non Single Premium 39,38,283 38,87,569 1.30%
Group Single Premium 84 26 223.08%
Group Non Single Premium 1,518 1,326 14.48%
Group Yearly Renewable Premium 3,697 2,452 50.77%
LIC No. of Policies 41,00,959 40,56,406 1.10%

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 2.19% for March 2024. There was a dichotomy, once again. Private insures saw growth of 5.73% in number of policies sold in March 2024 while LIC saw number of policies sold grow by just 1.10%. Normally, LIC had managed to show growth in number of policies sold in the past, but focus has perhaps shifted to NBP. However, this gap has substantially narrowed in March 2024.
  • If you look at the overall number of policies sold for March 2024 at 54.18 Lakh policies, the contributions of LIC and private insurers are still far off. However, private insurers saw their share of number of policies fall sharply to 24.31%, compared to 27.36% in February 2024 to 31.14% in January 2024. In contrast, LIC saw its share of number of policies grow to 75.69% in March against 72.64% in February and 68.86% in January.

On a yoy basis, the share of LIC has approximately remained static in March 2024.

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 12,58,824 12,84,829 -2.02%
Individual Non Single Premium 2,79,18,053 2,71,90,005 2.68%
Group Single Premium 2,659 1,936 37.35%
Group Non Single Premium 5,360 6,517 -17.75%
Group Yearly Renewable Premium 37,640 33,894 11.05%
Grand Total No. of Policies 2,92,22,536 2,85,17,181 2.47%
PRIVATE INSURANCE COMPANIES      
Individual Single Premium 3,11,922 2,80,544 11.18%
Individual Non Single Premium 84,71,982 77,65,353 9.10%
Group Single Premium 1,994 1,232 61.85%
Group Non Single Premium 109 234 -53.42%
Group Yearly Renewable Premium 6,224 4,763 30.67%
Private Insurer No. of Policies 87,92,231 80,52,126 9.19%
LIC OF INDIA      
Individual Single Premium 9,46,902 10,04,285 -5.71%
Individual Non Single Premium 1,94,46,071 1,94,24,652 0.11%
Group Single Premium 665 704 -5.54%
Group Non Single Premium 5,251 6,283 -16.43%
Group Yearly Renewable Premium 31,416 29,131 7.84%
LIC No. of Policies 2,04,30,305 2,04,65,055 -0.17%

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

Here are some quick takeaways from the data points on number policies sold for FY24 (Apr-Feb) and how they compared with fiscal year FY23.

  • The overall insurance sector saw modest growth in terms of number of policies sold at 2.47% for FY24 (Apr-March) compared to the year ago period. However, there was a dichotomy once again. The private insures saw growth of 9.19% in terms of number of policies sold in FY24, while LIC saw number of policies sold contract by -0.17% in the same period. LIC has been focussing more on NBP in recent months,.
  • If you look at the overall number of policies sold for FY24 (Apr-Mar) at 292.23 Lakh policies, the contributions of LIC and private insurers are still far off. Private insurers accounted for 30.09%, higher than 28.24% in the year ago period. LIC saw its share at 69.91% in FY24; lower than 71.76% in FY23. The focus on NBP appears to be manifesting itself in the form of a lower share for LIC on number of policies sold.

LIC APPEARS TO BE PLAYING THE NBP GAME QUITE EFFECTIVELY

Normally, March is the month when LIC used to traditionally see most of its policy sales, but this time the NBP growth has been robust in March despite the impact of the new tax regime (NTR). Apparently, the LIC has moved beyond its obsession with Section 80C to sell life insurance products. It was actually high time the paradigm changed. 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, by laying greater accent on NBP (new business premium) growth, rather than just numbers. For a list stock, dependent on positive cues, that has surely come as manna from heaven.

Related Tags

  • HDFC Life Insurance
  • ICICI Prudential Life Insurance
  • IRDA
  • IRDAI
  • LIC
  • Life insurance
  • Life Insurance Corporation
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