India: Life insurers' premiums dropped y-o-y

| 11 Dec 2023

The life insurance industry reported a 25.28% decline in new business premium income in November 2023 to INR26,494.83 crore from INR34,588.8 crore recorded a year ago. The fall in group premium and change in taxation norms for policies with a higher ticket size dragged down the premiums of the state-run Life Insurance Corporation of India (LIC) and private insurers, respectively.

According to the data released by the Life Insurance Council, the premium of private insurers slipped 9.33% y-o-y to INR10,360.29 crore from INR11,426.73 crore as a result of a change in product mix due to the measures taken to counter the impact of tax imposed on the premiums of INR5 lakh. On the other hand, LIC’s premiums dropped by 32.86% to INR16,134.55 crore from INR24,032.07 crore as a result of a decline in group premiums.

The group premium of LIC dropped by 37.48% to INR11,649.54 crore in the reported month from INR18,635.93 crore. The fall in the business has affected the overall group premium of the industry which fell by 34.02% to INR14,735.49 crore from INR22,334.95 crore across the time period.

“If you look at the numbers, you can see the majority of the fall has been in the group premiums, both single and non-single. LIC generally dominates the group segment. A fall in their business will affect the entire industry numbers,” said Saurabh Bhalerao, Associate Director at CareEdge.

Among the private insurance companies, SBI Life Insurance, the largest private insurer, reported a 9.84% decline in premiums to INR2,381.73 crore. HDFC Life Insurance saw a 20.70% Y-o-Y fall to INR2,159.73 crore.

“The underlying theme that is running through the entire life insurance segment for the current year is the change in taxation norms. There could have been a change in the product mix to accommodate this which has affected the private insurance players,” Bhalerao added.

The individual single premium of the insurance companies slipped by 14.81% to INR3,322.48 crore from INR3,900.04 crore in the time period under consideration. Whereas, the private insurers lost 18.93% premium in the space to INR1,395.1 crore as compared to INR1,720.81 crore across the time period, reported Business Standard.