Despite a large base, new business premia of life insurers increased by 18 per cent, indicating robust demand for life insurance
With the pandemic subsiding, and restrictions easing in the economy, the demand for life insurance has again started picking up. The figures in the latest business statement released by the Life Insurance Council show the industry is perhaps moving towards that.
According to data from Life Insurance Council, life insurance companies reported 18 per cent year-on-year (YoY) growth in new business premia (NBP) in August, thanks to substantial growth in premia of private sector insurers. NBP is the premium received from new policies in a particular year. It is the total of the first-year premium, and single premium accounted for during the year.
Life insurers reported an NBP of Rs 32,856.38 crore in August, while Life Insurance Corporation (LIC) reported an NBP of Rs 21,882 crore, up 15 per cent. Private insurers' NBP rose by 24 per cent to Rs 10,974.25 crore.
According to experts, private insurers reported strong growth due to substantial demand for group single premia and group yearly renewable premia. They also said that health insurers would continue to see robust growth as the pandemic subsided, and fewer economic restrictions now exist. From the big private sector insurance players, SBI Life and HDFC Life's NBP increased by 21 per cent and 16.80 per cent, respectively, while ICICI Prudential Life's NBP increased by 11.3 per cent. In July, life insurance companies' NBP rose 91 per cent YoY.
Non-life insurer’s premium growth
The non-life insurance companies, including specialised PSU insurers, standalone health insurers, and general insurers, saw their premia grow 12 per cent YoY to Rs 4,471 crore in August, mainly owing to the strong increase in premiums of standalone health insurers (SAHI).
Since the beginning of Covid, the health segment has been driving its growth. The non-life insurers have reported a 19 per cent growth in premia to Rs 1.02 trillion in FY23. While SAHI companies have posted a 27 per cent growth in FY23, general insurers posted a 19 per cent growth.
Among the big players, ICICI Lombard, the largest private sector general insurer, witnessed a 59 per cent growth in premia, while HDFC Ergo reported a 50 per cent growth in premia. On the other hand, Bajaj Allianz General's premia saw a sharp drop of 24 per cent. In addition, state-owned New India Assurance reported a 1.25 per cent drop in premia.