Life Insurance: Monthly First Year Premiums Drop in Nov;

YTD Group Reduces, while Individual Remains Flat

December 12, 2023 l BFSI Research

Overview
Following robust growth in FY23, first-year premium numbers in FY24 have been moving in a subdued manner. For November 2023, first-year life insurance
premiums witnessed a reduction of 25.3%, compared to the increase of 30.5% witnessed in the same period last year. The premiums were affected by the fall
in group premiums and the change in taxation norms. Another reason for the drop in premiums could be attributed to the holiday shortened months which
impacted the numbers.

Additionally, YTDFY24 new business premiums of life insurers reported a drop of 12.7% compared to the 34.1% growth in YTDFY23. The y-o-y decline can be
attributed to a substantial reduction in group premiums, the introduction of a new tax regime, and the significant momentum experienced in March 2023. While
private insurance companies have maintained growth and have continued to play a mitigating role by counteracting the dip in LIC premiums, their pace has been
comparatively subdued in comparison to the previous year. Larger private companies witnessed better growth compared to their smaller counterparts.

Figure 1: Movement in Monthly First-year Premium (Rs crore)

Month Premium in FY22 Premium in FY23 Premium in FY24 FY22 vs FY21 (%) FY23 vs FY22 (%) FY24 vs FY23 (%)
April 9,738.8 17,939.6 12,565.3 44.8 84.2 -30.0
May 12,977.0 24,480.4 23,477.8 -5.5 88.6 -4.1
June 30,009.5 31,254.6 36,961.8 4.0 4.1 18.3
July 20,434.7 39,078.9 27,867.1 -11.1 91.2 -28.7
August 27,820.7 32,856.4 26,788.6 2.9 18.1 -18.5
September 31,001.2 36,366.5 30,716.3 22.2 17.3 -15.5
October 21,606.3 24,916.6 26,819.0 -5.1 15.3 7.6
November 27,177.3 35,458.8 26,494.8 41.8 30.5 -25.3
December 24,466.5 26,838.3 0.3 9.7
January 21,957.0 26,423.7 2.7 20.3
February 27,464.8 22,847.7 22.5 -16.8
March 59,608.8 52,081.1 37.3 -12.6
Source: Life Insurance Council, IRDAI

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 Life Insurance: Monthly First Year Premiums Drop in Nov; YTD Group Reduces, while Individual Remains Flat

Figure 2: First-year Premium Growth of Life Insurance Companies (Rs crore)

For Nov For Nov For Nov Nov 2022 Nov 2023 YTD FY23 YTD FY24
Insurers YTD FY22 YTD FY23 YTD FY24
2021 2022 2023 Growth Growth Growth Growth
Top 5 Private 8,380.9 8,090.0 7,319.5 -3.5% -9.5% 47,938.1 54,341.8 61,254.6 13.4% 12.7%
Private ex Top 5 2,828.9 3,336.7 3,040.8 18.0% -8.9% 18,246.4 23,867.2 26,011.7 30.8% 9.0%
Private 11,209.8 11,426.7 10,360.3 1.9% -9.3% 66,184.5 78,209.0 87,266.3 18.2% 11.6%
LIC 15,967.5 24,032.1 16,134.6 50.5% -32.9% 1,14,580.9 1,64,143.3 1,24,424.3 43.3% -24.2%
Total 27,177.3 35,458.8 26,494.8 30.5% -25.3% 1,80,765.4 2,42,352.3 2,11,690.6 34.1% -12.7%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

• All companies have fallen for the month. Meanwhile, if we compare November 2023 to November 2021 numbers, LIC has shown some growth, while
private companies have witnessed a decrease. On the other hand, for the year-to-date period, private companies have continued their growth compared
to LIC’s fall. Larger private companies have grown faster than their smaller counterparts. Apart from the taxation norms, the dip may also be due to
holidays and could increase after the festival season ends and as the last quarter of the financial year starts. Private companies, especially the larger ones,
have broadly increased their share.

Figure 3: First-year Premium of Life Insurance Companies (% Share)

Insurers For Nov 2021 For Nov 2022 For Nov 2023 YTD FY22 YTD FY23 YTD FY24
Top 5 Private 30.8% 22.8% 27.6% 26.5% 22.4% 28.9%
Private ex Top 5 10.4% 9.4% 11.5% 10.1% 9.8% 12.3%
Private 41.2% 32.2% 39.1% 36.6% 32.3% 41.2%
LIC 58.8% 67.8% 60.9% 63.4% 67.7% 58.8%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

Figure 4: First-year Group Premiums Growth of Life Insurance Companies (Rs crore)
For Nov For Nov For Nov Nov 2022 Nov 2023 YTD FY23 YTD FY24
Insurers YTD FY22 YTD FY23 YTD FY24
2021 2022 2023 Growth Growth Growth Growth
Top 5 Private 4,553.5 3,179.0 2,590.3 -30.2% -18.5% 20,647.0 22,737.6 26,251.5 10.1% 15.5%
Private ex Top 5 1,078.5 1,166.0 1,052.3 8.1% -9.7% 7,011.4 9,597.0 10,848.7 36.9% 13.0%
Private 5,632.0 4,345.0 3,642.6 -22.9% -16.2% 27,658.5 32,334.6 37,100.2 16.9% 14.7%
LIC 11,598.1 19,300.2 11,871.5 66.4% -38.5% 83,766.0 1,30,757.5 90,927.5 56.1% -30.5%
Total 17,230.1 23,645.2 15,514.0 37.2% -34.4% 1,11,424.5 1,63,092.1 1,28,027.7 46.4% -21.5%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

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 Life Insurance: Monthly First Year Premiums Drop in Nov; YTD Group Reduces, while Individual Remains Flat

• For November, LIC as well as the private sector witnessed a fall in both group as well as individual segments which could be attributed to a holiday-shortened
month coupled with taxation norms. For YTDFY24, while private companies have continued their growth momentum, LIC has eked out a small growth in the
individual segment. For YTDFY24, the share of large 5 companies has moved past LIC in individual premiums, while LIC continues to dominate the group
segment. LIC has recently launched a product titled “Jeevan Utsav” – a Non-Linked, Non-Participating, Individual, Savings, Whole Life Insurance plan that it
expects to regain its growth momentum.

Figure 5: First-year Individual Premiums Growth of Life Insurance Companies (Rs crore)
For Nov For Nov For Nov Nov 2022 Nov 2023 YTD FY23 YTD FY24
Insurers YTD FY22 YTD FY23 YTD FY24
2021 2022 2023 Growth Growth Growth Growth
Top 5 Private 3,827.3 4,911.0 4,729.2 28.3% -3.7% 27,291.1 31,604.3 35,003.1 15.8% 10.8%
Private ex Top 5 1,750.4 2,170.7 1,988.5 24.0% -8.4% 11,235.0 14,270.2 15,163.0 27.0% 6.3%
Private 5,577.7 7,081.8 6,717.7 27.0% -5.1% 38,526.1 45,874.5 50,166.1 19.1% 9.4%
LIC 4,369.4 4,731.9 4,263.1 8.3% -9.9% 30,814.9 33,385.7 33,496.8 8.3% 0.3%
Total 9,947.1 11,813.7 10,980.8 18.8% -7.0% 69,341.0 79,260.2 83,663.0 14.3% 5.6%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

Figure 6: First-year Individual Non-single Premiums (Rs crore)

For Nov For Nov For Nov Nov 2022 Nov 2023 YTD FY23 YTD FY24
Insurers YTD FY22 YTD FY23 YTD FY24
2021 2022 2023 Growth Growth Growth Growth
Top 5 Private 2,788.3 3,491.9 3,569.8 25.2% 2.2% 19,350.7 21,970.5 25,261.2 13.5% 15.0%
Private ex Top 5 1,436.0 1,869.0 1,752.8 30.2% -6.2% 9,230.4 12,099.7 12,757.1 31.1% 5.4%
Private 4224.37 5360.89 5322.61 26.9% -0.7% 28581.14 34070.17 38018.27 19.2% 11.6%
LIC 2244.1 2552.72 2335.71 13.8% -8.5% 16216.08 18566.81 18493.67 14.5% -0.4%
Total 6,468.5 7,913.6 7,658.3 22.3% -3.2% 44,797.2 52,637.0 56,511.9 17.5% 7.4%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

• First-year Individual Non-single Premiums of private companies grew faster than the industry. Private companies in aggregate have a significantly larger
share compared to LIC. Even the larger companies put together have a higher share in this segment.

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 Life Insurance: Monthly First Year Premiums Drop in Nov; YTD Group Reduces, while Individual Remains Flat

Figure 7: Number of First-year Individual Non-single Policies

For Nov For Nov For Nov Nov 2022 Nov 2023 YTD FY23 YTD FY24
Insurers YTD FY22 YTD FY23 YTD FY24
2021 2022 2023 Growth Growth Growth Growth
Top 5 Private 3,34,211 4,02,661 4,00,781 20.5% -0.5% 24,83,761 27,14,371 30,43,437 9.3% 12.1%
Private ex Top 5 2,11,080 2,33,299 2,42,395 10.5% 3.9% 14,82,101 17,13,057 17,74,638 15.6% 3.6%
Private 5,45,291 6,35,960 6,43,176 16.6% 1.1% 39,65,862 44,27,428 48,18,075 11.6% 8.8%
LIC 15,27,708 14,05,559 13,14,364 -8.0% -6.5% 99,47,915 1,04,31,393 1,02,91,144 4.9% -1.3%
Total 20,72,999 20,41,519 19,57,540 -1.5% -4.1% 1,39,13,777 1,48,58,821 1,51,09,219 6.8% 1.7%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

• In November 2023, LIC’s first-year individual non-single policies fell, while the private companies witnessed muted growth. However, the larger companies
reported marginal growth, while the other companies eked out some growth. Despite all of this, LIC has over two-thirds share of policies sold in this segment.
Meanwhile, for November 2023, mixed trends can be observed in ticket size, large private companies grew while other companies as well as LIC witnessed a
fall. LIC continues to have a significantly smaller premium per policy due to the product mix offered to consumers and the thrust on increasing penetration
in smaller areas which results in lower premiums.

Figure 8: Single Premium as a Share of Total First Year Premiums (%)

Insurers For Nov 2021 For Nov 2022 For Nov 2023 YTD FY22 YTD FY23 YTD FY24
Top 5 Private 62.2% 51.4% 46.2% 54.4% 53.4% 53.0%
Private ex Top 5 41.6% 37.8% 36.1% 39.0% 38.9% 42.0%
Private 57.0% 47.4% 43.3% 50.2% 48.9% 49.7%
LIC 82.5% 86.6% 84.1% 83.7% 86.1% 82.5%
Total 72.0% 74.0% 68.2% 71.4% 74.1% 69.0%
Source: IRDAI, Life Insurance Council; Note: Top 5 include Bajaj Allianz Life, HDFC Life, ICICI Pru Life, Max Life and SBI Life

• The share of single premium moved up marginally to 49.7% for private players in November 2023. Larger private companies source a larger share of their
premiums from single premiums compared to the smaller private sector companies, while LIC derives over 80% from single premiums, which has been
moving down marginally.

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 Life Insurance: Monthly First Year Premiums Drop in Nov; YTD Group Reduces, while Individual Remains Flat

CareEdge View
In FY23, life insurance companies exhibited significant top-line growth, attributable to factors such as it being the first full year unencumbered by Covid-related
constraints, an increase in the non-participating (non-par) segment during the last quarter of FY23, along with a rise in term policies (protection plans). After this
strong growth in FY23, the industry has witnessed a slowdown over YTDFY24. The fall in performance can be attributed to customers purchasing insurance
policies in March 2023, right before the implementation of budgetary changes and deceleration in group business. The life insurance enterprises have been
strategically adjusting their policy portfolio to promote growth, albeit at a more measured pace in FY24 Despite these short-term fluctuations, the overarching
growth potential of the life insurance segment remains resilient. This can be attributed to factors, such as the existing protection gap within the market, a
regulatory framework that fosters industry development (“Insurance for all” by 2047), and the sustained necessity for insurance provisions. Considering these
factors, CareEdge believes the long-term trajectory for growth in the life insurance sector continues to remain positive.

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 Life Insurance: Monthly First Year Premiums Drop in Nov; YTD Group Reduces, while Individual Remains Flat

Contact
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Saurabh Bhalerao Associate Director – BFSI Research saurabh.bhalerao@careedge.in +91 - 22 - 6754 3519 / +91 - 90049 52514
Mradul Mishra Media Relations mradul.mishra@careedge.in +91 - 22 - 6754 3596

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