Life Insurance Premium Sees Significant Upsurge in July: CareEdge

The first-year premium of life insurers jumped to Rs 39,079 crore in July 2022 from Rs 20,435 crore in July 2021, exhibiting a y-o-y growth rate of 91.2%, which was significantly higher than the rate reported in July 2020, while last July (i.e., July 2021), the segment reported a decline.

"The growth can primarily be attributed to group single premiums and more specifically to LIC. The year-to-date first-year premium numbers grew by 54.1% vs. 1.2% growth reported in the same period last year. After the listing of LIC, over 80% of new business premium comes from directly listed entities. The year-to-date growth too can be attributed to an increase in group single premiums, and by a low base, which saw subdued levels due to the pandemic-induced (Covid-19 second wave) lockdowns," CareEdge has said.

Private insurers grew at 18.5% in July 2022 vs. 29.2% in June 2022 and 7.5% in July 2021 (base effect/ lockdown disruptions). Meanwhile, LIC's firstyear premium rose significantly by 142% for July 2022 against a decline of 20.7% witnessed in July 2021. The monthly increase can be attributed to a rise in group single premiums. The year-to-date numbers, LIC reported a growth rate of 62.3% against a decline reported for the same period last year. Meanwhile, its private peers improved their growth rate to 38.8% from 23.8% last year. LIC continues to maintain its dominant share in the first-year premium (68.6% vs. 31.4% share of private companies).

For July 2022, non-single premiums maintained their growth rate of 11.8% vs. 11.6% reported in July 2021. On the other hand, single premiums reported a substantial growth rate of 134.3%, compared to a drop of 19.9% last July. Single premiums continue to account for a substantial portion of the overall first-year premiums. The share of single premiums has increased from 60% for FY20 to 69% in FY22 and is at 75% for the first four months of FY23 (vs. 72% for the first four months of FY22).