New business premiums (NBPs) underwritten by Indian life insurers have gained a robust year-on-year (Y-o-Y) growth of around 16 per cent last month, according to the Life Insurance Council report for May. The year-to-date (YTD) figures have reported a 31 per cent surge over the same period in 2023. New business premiums grew from Rs 23,448 crore in May 2023 to Rs 27,034 crore in the same month this year, the report shows. YTD collections surged even more from Rs 36,043 crore to Rs 47,293 crore in 2024.
Increase in Policy Issuance
The life insurance industry in the country has been growing significantly as the penetration of insurance accessibility is reaching out to areas and segments where people otherwise were underserved.
Driven by strong demand for enhanced insurance protection from individual consumers, new policy issuances increased by 12.45 per cent on a Y-o-Y basis in May 2024. This has resulted in the addition of new 18,68,096 policies vis-à-vis 16,61,324 policies in the year-ago period.
New Policy Issuances:
May 2023: 16,61,324 policies
May 2024: 18,68,096 policies
Growth: 12.45 per cent YoY
Growing Premiums
The data by the Life Insurance Council shows that the life insurance industry saw individual single premiums growing by 18.3 per cent on a Y-o-Y basis at Rs 3,351 crore for May 2024. The YTD growth stood at 21.49 per cent.
Individual non-single premiums came in at Rs 6,916 crore and grew by almost 19 per cent in May 2024, even as YTD collections settled at 20.14 per cent higher than the corresponding period last year.
What is driving this growth?
Life insurers are increasingly putting more focus on encouraging first-time life insurance buyers to buy essential life insurance solutions which in turn is driving this growth of the insurance industry.
This has contributed to the 18.58 per cent growth in combined individual premium collections for May 2024 and 21 per cent growth on a YTD basis.
In the Group policy segment, single premiums grew by 17 per cent with monthly collections coming in at Rs 15,976 crores. The segment also saw around 14 per cent growth in premiums collected last month alone while new policy issuances expanded by around 22 per cent on a Y-o-Y basis.
The insurance workforce grows too
By expanding access to insurance and reaching areas and segments of the population that were previously underserved, the insurance industry has tapped into its growth potential.
Life insurers added more than 1,30,000 individual life insurance agents even as they had to contend with an overall 0.2 per cent drop in cumulative agent count due to attrition, according to the council’s report. Digitilisation of life insurance platforms has contributed to some additional gains in insurance penetration, the report finds hinting that the NBPs are set to grow further in FY25.
