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Private insurers NBP bounces in June, but LIC still leads Q1FY25

15 Jul 2024 , 09:19 AM

LIC DOES BETTER IN A ROBUST JUNE 2024

The Life Insurance Council released the full month data stack in terms of new business premium (NBP) collections for June 2024 and for the cumulative first quarter of FY25. The news is that while the private sector insurance companies have shown a smart rebound in the new business premium (NBP) collections in June 2024, it is the LIC that continues to dominate the first quarter of FY25 in terms of NBP growth. Apart from the NBP growth data, the Life Insurance Council has also put out data on the growth in number of policies. On this measure, LIC has done better than the private insurers in June 2024, again a reversal of the trend in the last few months. So, it has been win some; lose some. The private insurers have gained in terms of growth in new business premiums (NBP) in June 2024, but LIC has done marginally better in terms of growth in total number of policies sold.

We now have cumulative data for the first quarter of FY25, so it becomes a lot more meaningful, in terms of its predictive powers. 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. Apart from monthly numbers and yoy comparison, the data of cumulative performance of private insurers and LIC for fiscal year FY25 (Apr-Jun) is also provided. Here is the gist. LIC has done better cumulatively for FY25 on NBP growth and on growth in number of policies sold in June 2024. On the other hand, private insurers have done better on NBP growth for June 2024 and in terms of number of policies growth, they have dong better on cumulative FY25 basis.

IT WAS MORE OF A MIXED STORY IN JUNE 2024

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

PARTICULARS	NBP (Jun-2024)	NBP (Jun-2023)	Growth YOY (%) Jun-24 / Jun-23	Growth YOY (%) FY24 / FY23
Individual Single Premium	3,823.65	3,609.40	5.94%	14.87%
Individual Non Single Premium	8,310.61	6,948.27	19.61%	19.92%
Group Single Premium	28,711.03	25,299.33	13.49%	27.84%
Group Non Single Premium	510.78	125.83	305.93%	-12.73%
Group Yearly Renewable Premium	1,077.62	978.92	10.08%	-5.34%
Grand Total Premium Flows	42,433.69	36,961.76	14.80%	22.91%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	1,738.98	1,558.30	11.59%	13.37%
Individual Non Single Premium	5,759.54	4,704.77	22.42%	24.19%
Group Single Premium	5,538.14	4,788.42	15.66%	10.19%
Group Non Single Premium	2.23	6.16	-63.80%	45.03%
Group Yearly Renewable Premium	1,027.93	933.30	10.14%	-9.14%
Private Insurer Premium Flows	14,066.82	11,990.94	17.31%	14.62%
LIC OF INDIA
Individual Single Premium	2,084.67	2,051.11	1.64%	16.16%
Individual Non Single Premium	2,551.07	2,243.51	13.71%	11.78%
Group Single Premium	23,172.89	20,510.91	12.98%	33.49%
Group Non Single Premium	508.55	119.67	324.96%	-13.88%
Group Yearly Renewable Premium	49.69	45.63	8.90%	86.62%
LIC Premium Flows	28,366.87	24,970.82	13.60%	28.11%

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

What do we read from the data on insurance business for June 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 14.80% in June 2024. This is despite an elevated base in the comparable month of June 2023; which can be attributed to the efforts by the insurance industry to push insurance as a standalone product. It may be recollected that the new tax regime (NTR) does away with exemptions like Section 80C, which covers life insurance premiums. Thus, life insurance has to be now sold as a personal financial planning tool, rather than as a tax saving tool. The market for life insurance is still there; although the low hanging fruit is gone. The undertone since December 2023 had shifted in favour of LIC and the trend continued till May; although private insures showed better NBP growth traction in June 2024. The private insurers saw first year NBP expand by 17.31% in June 2024 while LIC saw first year NBP expand by a just 13.60% yoy. This shows a rebound by private insurers.
If you look at the overall premium collections for the month of June 2024 at ₹42,434 Crore, the contributions of LIC has still improved compared to the private insurers. For instance, private insurers accounted for just 33.15% in June 2024; compared to 38.26% in May 2024, 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 66.85% of total NBP in June 2024; compared to 61.74% in May 2023, 61.13% in April 2024, 60.29% in March 2024, 58.67% in February 2024 and 56.38% in January 2024. It looks like the benefits for the private insurers in June 2024 is more from the low base effect, even as LIC builds its NBP share.

The single-minded focus of LIC on improving its NBP appears to have worked well in the last 6 months. More importantly, even the better performance in June 2024 by the private insurers in terms of NBP growth is more due to the base effect, as LIC has actually built its NBP share in June 2024 to a large extent.

LIC BETTERS PRIVATE INSURERS IN POLICIES SOLD IN JUNE 2024

If new business premiums (NBP) is about fresh money flows into the insurer, the number of policies are about the retail spread and the future funnel of growth. NBP deepens the wallet share while number of policies widens the client base. The table below captures the performance of LIC, private insurers and the overall insurance sector for the month of June 2024 in terms of growth in the number of policies; compared to the base of June 2023.

PARTICULARS	Policies (Jun-2024)	Policies (Jun-2023)	Growth YOY (%) Jun-24 / Jun-23	Growth YOY (%) FY24 / FY23
Individual Single Premium	1,04,637	97,233	7.61%	16.07%
Individual Non Single Premium	20,71,029	18,42,335	12.41%	11.69%
Group Single Premium	308	147	109.52%	77.57%
Group Non Single Premium	334	347	-3.75%	-1.43%
Group Yearly Renewable Premium	2,974	3,467	-14.22%	3.97%
Grand Total No. of Policies	21,79,282	19,43,529	12.13%	11.89%
PRIVATE INSURANCE COMPANIES
Individual Single Premium	24,320	20,499	18.64%	21.28%
Individual Non Single Premium	6,89,473	6,17,289	11.69%	13.76%
Group Single Premium	254	121	109.92%	67.94%
Group Non Single Premium	5	8	-37.50%	-7.41%
Group Yearly Renewable Premium	530	514	3.11%	4.04%
Private Insurer No. of Policies	7,14,582	6,38,431	11.93%	14.02%
LIC OF INDIA
Individual Single Premium	80,317	76,734	4.67%	14.42%
Individual Non Single Premium	13,81,556	12,25,046	12.78%	10.66%
Group Single Premium	54	26	107.69%	125.00%
Group Non Single Premium	329	339	-2.95%	-1.26%
Group Yearly Renewable Premium	2,444	2,953	-17.24%	3.95%
LIC No. of Policies	14,64,700	13,05,098	12.23%	10.85%

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

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

The overall insurance sector saw yoy growth in number of policies sold at 12.13% for June 2024. There was a minor dichotomy. Private insures saw growth of 11.93% in number of policies sold in June 2024 while LIC saw number of policies sold grow by 12.23%. Generally, growth in number of policies is dominated by private insurers and for a change, LIC has got the upper hand this month. If you look at the cumulative data for the 3 months of FY25, it is the private insurers who continue to lead the growth stakes.
If you look at the overall number of policies sold for June 2024 at 21.79 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 32.79% in June 2024; compared to 03% in May 2024, and 35.17% in April 2024. In contrast, LIC saw its share of number of policies at 67.21% in June 2024; compared to 66.97% in May 2024 and 64.83% in April 2024.

Let us now turn to how the five largest private life insurers saw NBP growth adding up in the month of June 2024.

NBP TRENDS: KEY PRIVATE LIFE INSURERS BUILD HEFT IN JUNE 2024?

In the month of June 2024, private insurers saw better growth in new business premium (NBP) compared to LIC; although it was on a lower base. LIC still improved its market share of NBP premiums in June. Here is a look at the 5 major private life insurers, whose NBP accounts for 68.2% of the total NBP collected by private insurers in June 2024. Let us begin with SBI Life Insurance.

SBI LIFE INSURANCE COMPANY	Jun-24 NBP (₹ in Crore)	Jun-23 NBP (₹ in Crore)	YOY Growth (in %)
Individual Single Premium	604.94	579.33	4.42%
Individual Non Single Premium	1,207.15	1,013.44	19.11%
Group Single Premium	1,123.12	780.67	43.87%
Group Non Single Premium	0.39	2.20	-82.27%
Group Yearly Renewable Premium	54.36	79.07	-31.25%
Total	2,989.95	2,454.71	21.80%