Life insurers’ new business premiums rise by 4.1% in June to Rs 31,254 cr


The life insurance sector recorded a weak growth of 4.14% in new business premiums in June, mainly due to the contraction in premiums observed by Life Insurance Corporation (LIC). However, in the April-June quarter (Q1FY23), life insurers saw their new business premiums (NBP) increase by 40% compared to the same period a year ago, due to a base weaker.

In June, life insurers brought in Rs 31,254.55 crore as NBP, registering a growth of only 4.14% compared to the same period last year. While private insurers recorded NBP growth of 29% to Rs 10,610.89 crore, LIC’s NBP contracted by 5% to Rs 20,643.67 crore, according to data released by the Life Insurance Council. . The decline in LIC’s NBP can be attributed to a 10% drop in the group single bonus in June compared to the same period last year.

An e-mail sent to LIC to find out the reason for the reduction in the premium did not elicit a response. Shares of the company were trading at Rs 701.45, down 0.23% at 2:13 p.m.

Among other large insurers, while SBI Life recorded NBP growth of nearly 60% in June, driven by substantial growth in collective single premium and non-single individual premium, HDFC Life’s NBP increased by 11% over the same period. ICICI Prudential Life, however, reported a 14.5% decline in NBP over the same period.

Last year, the first two months – April and May – were marred by lockdowns due to the devastating second wave of Covid-19. But the situation improved from June with the opening of the economy. April and May this year saw life insurers record impressive growth figures due to last year’s weak base. In April, the NBP of insurers increased by 84% and in May it increased by 88%.

Despite a disappointing June for LIC, during the first quarter (Q1), its NBP rose 35% to Rs 48,201 crore from the same period a year ago. But private sector insurers outperformed LICs, with their NBP increasing by more than 48% over the same period, leading to industry NBP growth of around 40%.

Experts believe that premium growth for life insurers will remain healthy this year, given that it is the first year without any restrictions. While demand for term, annuity and guaranteed products is expected to remain strong, unit-linked products could suffer a little, given the volatility in equity markets. “For FY23, we expect private life insurers to grow in the mid- to upper-teens, with high-single-digit growth in LICs,” Emkay Research said in a report.


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