👍Life insurers’ new biz premium down 17% in Feb, LIC collections shrink 32% | Business Standard News

Clipped from: https://www.business-standard.com/article/companies/life-insurers-new-business-premium-down-17-in-february-shows-data-123030800913_1.html

Generally, the last quarter of a financial year is the busiest for life insurers as customers look to buy savings and term products to reduce their tax liability

Life insurance companies have reported a 17 per cent year-on-year (YOY) drop in new business premiums (NBP) in February, as state-owned insurer Life Insurance Corporation (LIC)’s premiums contracted by 32 per cent.

According to data released by the Life Insurance Council (LI Council), the industry earned an NBP of Rs 22,847.65 crore in February, a drop of 17 per cent from the same period a year-ago.

Generally, the last quarter of a financial year is the busiest period for life insurance companies as customers look to buy savings and term products to reduce their tax liability. In January, the industry had reported a 20 per cent jump in premiums, aided by the private sector companies’ performance.

While private sector companies managed to record a 10 per cent jump in premiums during this period to Rs 10,968 crore, insurance behemoth LIC’s premiums dropped 32 per cent to Rs 11,879.49 crore. In the same period a year-ago, LIC had earned premiums of Rs 17,489 crore.

NBP is the premium acquired from new policies in a year. It is the sum of the first-year premium and single premium, reflecting total premium received from the new businesses.

For LIC, group single premiums were the dampener, dipping over 40 per cent in February, dragging down its NBP.

For private sector companies, individual non-single premiums saw decent growth. Group single premiums also reported positive growth for these companies.

In 2022-23, so far, life insurers have reported a 25.06 per cent YoY increase in overall premiums to Rs 3.18 trillion, with LIC’s premium growing by 30 per cent, and private insurers’ premiums growing at 17.38 per cent.

Year-to-date FY23 growth can primarily be attributed to group single premia and a low base. Meanwhile, private players have been extending their lead in the individual non-single premium segment.