iifl-logo

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

Private insurers score on NBP growth; LIC on policy numbers in Sep-24

14 Oct 2024 , 12:32 PM

BETTER NBP GROWTH FOR PRIVATE INSURERS IN SEPTEMBER 2024

In the last few months, LIC had been consistently getting the better of private insurers in terms of growth in new business premium (NBP). However, there was a shift in September 2024 as the private insurers got the better of LIC in terms of monthly NBP growth. To be fair, the growth edge was not too high, but it was there, nevertheless. That is not likely to impact the cumulative growth on NBPs for the first 6 months of FY25. That is a more secular trend.

As is the practice each month, the Life Insurance Council released full month data stack of new business premium (NBP) collections for September 2024 and for the cumulative 6 months from April to September of FY25. The news is that after months of lagging LIC in terms of NBP growth, the private insurers have got a small edge in the month of September 2024. However, to compensate for the lower growth in NBP, the LIC has given a big boost to its number of policies sold in September, a metrics on which LIC was trailing the private insurers. In fact, LIC has given a big thrust to growth in number of policies in Sep-24.

DECISIVE SHIFT OF LIFE INSURANCE AWAY FROM TAX SAVING

But, the big story is that there appears to be a quiet, yet decisive shift in the way life insurance is being sold in India. For many years, the simple logic to buy life insurance was to save tax under Section 80C. However, all that changed with the advent of the New Tax Regime (NTR), which became the default tax regime from FY24 onwards. Under the NTR, most of the exemptions (including the exemptions under Section 80C) could be forfeited in lieu of a distinctively lower rate of tax. That was always the intent of the government.

This NTR has been a big hit and has taken away a large part of the ready market for life insurance products. However, it must be said that the Indian insurance industry has adapted reasonably well to the shift by focusing less on the tax shields and more on the financial planning aspects of life insurance. The good news is that life insurance is now being bought as a conscious financial planning strategy, rather than being sold as a low hanging fruit to save income tax. Life insurance has certainly come of age in the last two years.

PRIVATE INSURERS BETTER LIC IN NBP GROWTH IN SEP-24

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

PARTICULARS

NBP (Sep-2024)

NBP (Sep -2023)

Growth YOY (%) Sep -24 / Sep -23

Growth YOY (%) FY24 / FY23

Individual Single Premium

5,141.99

4,548.47

13.05%

15.00%

Individual Non Single Premium

11,500.11

8,504.08

35.23%

20.93%

Group Single Premium

17,052.25

16,077.93

6.06%

22.10%

Group Non Single Premium

115.62

260.98

-55.70%

-15.10%

Group Yearly Renewable Premium

1,210.31

1,324.83

-8.64%

-3.49%

Grand Total Premium Flows

35,020.28

30,716.29

14.01%

19.47%

PRIVATE INSURANCE COMPANIES        
Individual Single Premium

1,908.55

2,035.59

-6.24%

7.00%

Individual Non Single Premium

7,638.09

5,922.33

28.97%

24.45%

Group Single Premium

4,265.64

3,992.41

6.84%

3.92%

Group Non Single Premium

12.49

17.92

-30.30%

-5.13%

Group Yearly Renewable Premium

826.25

621.73

32.90%

-9.64%

Private Insurer Premium Flows

14,651.02

12,589.97

16.37%

12.06%

LIC OF INDIA        
Individual Single Premium

3,233.44

2,512.89

28.67%

21.60%

Individual Non Single Premium

3,862.02

2,581.75

49.59%

13.82%

Group Single Premium

12,786.61

12,085.52

5.80%

28.81%

Group Non Single Premium

103.13

243.06

-57.57%

-15.42%

Group Yearly Renewable Premium

384.06

703.10

-45.38%

22.17%

LIC Premium Flows

20,369.26

18,126.32

12.37%

24.73%

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

What do we gather from the data on insurance business for September 2024 in terms of the first year premium collections by private insurers and LIC?

  • The overall insurance sector saw robust yoy growth in first year premiums of 14.01% in September 2024. That is lower than August, but robust nevertheless. What is actually significant about the performance of insurers in terms of new business premiums (NBP) is that private insurers have growth NBP faster than LIC. In the last 9 months between December 2023 and August 2024, it was clearly LIC that was leading the stakes in NBP growth. That trend has changed in favour of the private insurers in September 2024, although the FY25 trend is still favouring LIC. The private insurers saw first year NBP expand by 16.37% in September 2024 while LIC saw first year NBP expand by a modest 12.37% yoy. However, that trend has not made any significant dent in the cumulative trend for the first six months of FY25. Overall NBP for FY25 (Apr-Sep) has grown 19.47%, but the dichotomy is again favouring LIC. For the first 6 months of FY25, private insurers grew NBP by 12.06% while LIC grew at 24.73% on yoy basis
  • If you look at the overall premium collections for the month of September 2024 it is higher than August 2024 at ₹35,020 Crore. What were the respective contributions of LIC and the private insurers? For instance, private insurers saw their share of NBP rise marginally 41.84% in September; compared to 40.85% in August, 42.08% in July, 33.15% in June, 38.26% in May, and 38.87% in April 2024. Private insurers have slightly picked up NBP share in September; albeit still lower than July 2024. In contrast, LIC accounted for 58.16% NBP market share in September 2024; compared to 59.15% in August, 57.92% in July, 66.85% in June, 61.74% in May, and 61.13% in April 2024. However, the positive takeaway for the private insurers is that they are holding their NBP share above 40% over the last 3 months.

Compared to August 2024, the private insurers have improved on NBP growth and also on NBP share. However, that has not really changed the cumulative NBP story of FY25, which continues to be dominated by LIC.

LIC PROVES ITS METTLE IN GROWTH IN NUMBER OF POLICIES

If new business premiums (NBP) is about fresh money flows into the insurer, the number of policies are about the retail spread as the future funnel of growth. Therefore, if NBP deepens the wallet share, the number of policies widens the client base. For an insurance company, both these business triggers do matter. The table below captures the performance of LIC, private insurers and the overall insurance sector for September 2024 in terms of growth in the number of policies; compared to the base of September 2023.

PARTICULARS

Policies (Sep -2024)

Policies (Sep -2023)

Growth YOY (%) Sep -24 / Sep -23

Growth YOY (%) FY24 / FY23

Individual Single Premium

1,49,887

1,24,090

20.79%

17.45%

Individual Non Single Premium

30,63,667

20,83,709

47.03%

13.46%

Group Single Premium

253

246

2.85%

56.29%

Group Non Single Premium

584

363

60.88%

19.05%

Group Yearly Renewable Premium

3,489

3,272

6.63%

3.75%

Grand Total No. of Policies

32,17,880

22,11,680

45.49%

13.64%

PRIVATE INSURANCE COMPANIES        
Individual Single Premium

28,076

27,949

0.45%

15.63%

Individual Non Single Premium

8,37,646

7,01,607

19.39%

13.33%

Group Single Premium

224

210

6.67%

53.22%

Group Non Single Premium

8

8

0.00%

77.14%

Group Yearly Renewable Premium

493

451

9.31%

4.07%

Private Insurer No. of Policies

8,66,447

7,30,225

18.65%

13.41%

LIC OF INDIA        
Individual Single Premium

1,21,811

96,141

26.70%

17.97%

Individual Non Single Premium

22,26,021

13,82,102

61.06%

13.52%

Group Single Premium

29

36

-19.44%

71.60%

Group Non Single Premium

576

355

62.25%

18.05%

Group Yearly Renewable Premium

2,996

2,821

6.20%

3.68%

LIC No. of Policies

23,51,433

14,81,455

58.72%

13.75%

Data Source: Life Insurance Council (Number of Policies are absolute figures) Here are some quick takeaways from the data points on insurance for September 2024 in terms of number of policies sold.

  • The overall insurance sector saw a sharp yoy expansion in number of policies sold at -45.49% for September 2024. In the last few months, if LIC dominated NBP growth, it was the private insurers that had dominated growth in number of policies. The tables turned full circle in September 2024. Private insures saw growth of 18.65% in number of policies sold in September 2024 while LIC saw robust growth in the number of policies sold at an incredible 58.72%. Generally, growth in number of policies is dominated by private insurers and the month of September saw a diametrical shift. If you look at the cumulative data for the 6 months of FY25, it now looks like an even stevens situation. For FY25, private insurers grew number of policies at 13.41% and LIC at 13.75%, resulting in overall industry growth in number of policies for FY25 at 13.64%.
  • If you look at the overall number of policies sold for September 2024 at 32.18 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 26.93% in September 2024; compared to 31.65% in August, 31.87% in July, 32.79% in June, 33.03% in May, and 35.17% in April 2024. The share of number of policies has been steadily falling for the private insurers. In contrast, LIC saw its share of number of policies at 73.07% in September 2024; compared to 68.35% in August, 68.13% in July, 67.21% in June, 66.97% in May and 64.83% in April 2024. Thanks to the big push in September; LIC has widened its lead over private insurers in terms of market share of number of policies sold.

Let us now turn to how the 5 largest private life insurers saw NBP growth adding up in the month of September 2024.

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

In the month of September 2024, private insurers saw 16.37% growth in new business premium (NBP), although it was still LIC that made the best of its first mover advantage. In terms of number of policies sold, LIC saw a turnaround in performance, widening its market share lead considerably. In September 2024, a total of 7 private insurers crossed ₹1,000 crore in new business premium (NBP). Here is a look at the top-5 private life insurers, whose NBP accounts for 65.97% of the total NBP collected by private insurers in September 2024. We start with SBI Life Insurance, which emerged the biggest private player by NBP in September 2024.

SBI LIFE INSURANCE COMPANY

Sep-24 NBP (₹ in Crore)

Sep-23 NBP (₹ in Crore)

YOY Growth (in %)

Individual Single Premium

694.74

638.27

8.85%

Individual Non Single Premium

1,558.40

1,428.03

9.13%

Group Single Premium

643.45

557.21

15.48%

Group Non Single Premium

0.85

4.16

-79.57%

Group Yearly Renewable Premium

94.33

232.75

-59.47%

Total

2,991.77

2,860.42

4.59%

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

With NBP of ₹2,991.77 Crore in September 2024, SBI Life Insurance saw 4.59% yoy growth in September 2024 NBP collections. The significant growth of 15.48% came from Group single premium policies; followed by individual non-single premium policy NBP growing at 9.13%. The group non-single premium and the group yearly renewable premium NBP contracted by -79.6% and -59.5% respectively in September 2024. Let us turn to HDFC Life Insurance.

HDFC LIFE INSURANCE COMPANY

Sep-24 NBP (₹ in Crore)

Sep -23 NBP (₹ in Crore)

YOY Growth (in %)

Individual Single Premium

298.83

319.56

-6.49%

Individual Non Single Premium

1,140.98

903.28

26.32%

Group Single Premium

1,214.73

1,212.49

0.18%

Group Non Single Premium

0.00

0.00

N.A.

Group Yearly Renewable Premium

15.93

11.36

40.23%

Total

2,670.46

2,446.68

9.15%

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

With NBP of ₹2,670.46 Crore in September 2024, HDFC Life Insurance has seen robust 9.15% growth in new business premium yoy. The significant growth of 40.23% came from group yearly renewable premium, followed by individual non-single premium growing at 26.32%. The individual single premium category witnessed contraction of -6.49% in September 2024. Let us turn to ICICI Prudential Life Insurance.

ICICI PRUDENTIAL LIFE INSURANCE

Sep-24 NBP (₹ in Crore)

Sep-23 NBP (₹ in Crore)

YOY Growth (in %)

Individual Single Premium

154.67

134.60

14.91%

Individual Non Single Premium

729.91

548.73

33.02%

Group Single Premium

500.72

507.83

-1.40%

Group Non Single Premium

0.00

0.00

N.A.

Group Yearly Renewable Premium

274.59

184.98

48.44%

Total

1,659.90

1,376.13

20.62%

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

With NBP of ₹1,659.90 Crore in September 2024, ICICI Prudential Life Insurance has seen healthy 20.62% growth in new business premium yoy. The significant growth of 48.4% came from group yearly renewable policies followed by individual non-single premium policies NBP growing at 33.0%. The only category that saw contraction of -1.4% in NBP in September 2024 was Group single premium policies. Let us shift focus to Tata AIA Life Insurance.

TATA AIA LIFE INSURANCE

Sep-24 NBP (₹ in Crore)

Sep-23 NBP (₹ in Crore)

YOY Growth (in %)

Individual Single Premium

119.03

56.34

111.27%

Individual Non Single Premium

918.40

577.08

59.15%

Group Single Premium

27.41

23.03

19.02%

Group Non Single Premium

0.35

0.33

6.06%

Group Yearly Renewable Premium

146.19

36.09

305.07%

Total

1,211.37

692.87

74.83%

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

With NBP of ₹1,211.37 Crore in September 2024, Tata AIA Life Insurance has seen robust 74.83% growth in new business premium yoy. Group yearly renewable premium policies led the NBP growth at 305.1%, followed by the Individual Single and Individual non-Single policies at 111.3% and 59.2% respectively. There was no NBP contraction visible in any of the categories for Tata AIA Life. Finally, let us shift our focus to Max Life Insurance.

MAX LIFE INSURANCE COMPANY

Sep-24 NBP (₹ in Crore)

Sep-23 NBP (₹ in Crore)

YOY Growth (in %)

Individual Single Premium

219.96

206.60

6.47%

Individual Non Single Premium

763.49

547.45

39.46%

Group Single Premium

138.57

117.42

18.01%

Group Non Single Premium

0.00

0.00

N.A.

Group Yearly Renewable Premium

9.41

5.56

69.24%

Total

1,131.42

877.03

29.01%

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

With NBP of ₹1,131.42 Crore in September 2024, Max Life Insurance has seen 29.0% growth in new business premiums yoy. The significant growth of 69.3% and 39.5% came from Group yearly renewable Premium and Individual non-single premium policies respectively. Max life Insurance Company did not see contraction in NBP in any of the categories.

The big story of September 2024 has been the revival of private sector insurers in NBP growth and the big thrust of LIC in growth in number of policies.

Related Tags

  • Insurance
  • IRDA
  • LIC
  • LifeInsurance
  • LifeInsuranceCorp
  • PrivateInsurers
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More

Invest Right News

BSE: Firing on all cylinders
9 Apr 2024|10:33 AM
Read More
Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.