New business premium of life insurance companies grew 18 per cent year-on-year (Y-o-Y) to Rs 35,417 crore in February, driven by robust growth at the state-owned Life Insurance Corporation of India (LIC) due to a favourable base.
The life insurance industry recorded nearly 40 per cent year-on-year (Y-o-Y) growth in new business premiums (NBP), aided by the rationalisation of goods and services tax (GST) on individual life insurance premiums, which has made policies more affordable for consumers.
The committee formed under the Life Insurance Council to review the commission structure in the life insurance sector has recommended capping distributor commissions or deferring them to ease acquisition costs. The recommendations will be sent to the insurance regulator -- Insurance Regulatory and Development Authority of India (Irdai).
Both the life and non-life insurance segment posted over 20 per cent premium growth in November for the first time in this financial year (FY26), supported by the reduction in goods and services tax (GST) on premiums from 18 per cent to zero and a favourable base effect.
Recent years have been turbulent for the insurance industry due to direct and indirect tax reforms, regulatory overhaul and other external pressures. The events cumulatively slowed growth rate to single digits from the high teens seen earlier.
New business premiums of life insurance companies dropped 5.2 per cent year-on-year (YoY) in August to Rs 30,959 crore, owing to a double-digit decline reported by state-owned Life Insurance Corporation (LIC), data from the Life Insurance Council showed. LIC recorded a 17 per cent YoY fall in new business premiums to Rs 16,023 crore during the month, while private life insurers reported a 12 per cent YoY increase to Rs 14,936 crore.
The new business premium (NBP) of life insurance companies dropped 21.7 per cent year-on-year (Y-o-Y) to Rs 30,218.71 crore in December 2024 on the back of a steep fall in business. According to data published by the Life Insurance Council, LIC's premium dropped 41.15 per cent Y-o-Y to Rs 13,523.87 crore while private insurers reported 7 per cent growth in NBP to Rs 16,694.85 crore as the industry absorbs the impact of the revised surrender value norms.
'Investment by insurers in the Bima Sugam India Federation is illegal as it is a private limited company.'
'It is imprudent on the part of Indian insurance companies to invest out of the shareholders' fund in a private limited company.'
Life insurers shifted their focus to selling high-value policies in October as the transition to new surrender value norms, effective October 1, limited their ability to roll out all products in their portfolio. This led to a 40 per cent year-on-year (Y-o-Y) drop in the number of policies sold in October. Additionally, distributors engaged in a fire sale of policies in September due to uncertainty about the impact of the new norms on their commission structures.
Life insurance companies reported a 13.16 per cent year-on-year (Y-o-Y) growth in new business premium (NBP), totting up Rs 30,347 crore in October, even as the number of policies sold saw a sharp decline. The growth was largely driven by strong performance from private sector life insurers.
Insurance companies reported nearly 23 per cent growth in first year premium in the first quarter of financial year 2024-25, when compared to the same period last year, with market leader LIC leading the charge with 28 per cent growth. According to the data released by the Life Insurance Council, the new business premium (NBP) increased by 22.91 per cent year-on-year (Y-o-Y) to ~89,726.7 crore in Q1FY25 from ~73,004.87 crore in Q1 FY24, reflecting a robust demand for insurance policies in the country.
The share of Life Insurance Corporation of India (LIC) in monthly new business premium (NBP) in the life insurance sector declined to 58.50 per cent in September 2023 from 68.25 per cent in September 2022 -- a drop of 975 basis points -- owing to shortcomings in the product and distribution side of business. However, the market share saw a marginal uptick from the 57.37 per cent recorded in August this year. According to the monthly business data released for September 2023 by the Life Insurance Council, the NBP of LIC up to September 2023 stood at Rs 92,462.62 crore as compared to about Rs 1.25 trillion in the same period a year ago.
The life insurance industry reported a 25.28 per cent decline in new business premium income in November 2023 to Rs 26,494.83 crore from Rs 34,588.8 crore recorded a year ago. The fall in group premium and change in taxation norms for policies with a higher ticket size dragged the premiums of the state-run Life Insurance Corporation of India (LIC) and private insurers, respectively. According to the data released by the Life Insurance Council, the premium of private insurers slipped 9.33 per cent Y-o-Y to Rs 10,360.29 crore from Rs 11,426.73 crore as a result of a change in product mix due to the measures taken to counter the impact of tax imposed on the premiums of Rs 5 lakh.
Contrary to expectations, the new business premium (NBP) of life insurance companies dropped 12.62 per cent year-on-year (YoY) in March 2023 due to an over 30 per cent drop in Life Insurance Corporation (LIC) of India's premiums, albeit on a high base. Data released by the Life Insurance Council shows the industry racked up NBP of Rs 52,081 crore in March 2023, compared with Rs 59,608.83 crore in the year-ago period. NBP is the premium acquired from new policies in a year. It is the sum of the first-year premium and single premium, reflecting the total premium received from new businesses.
The Life Insurance Corporation of India has the wherewithal to acquire a composite license, a top source aware of the development told Business Standard, adding that the insurance behemoth may look into entering the health and general insurance segments. "LIC has the scale, capacity, IT infrastructure, and the distribution reach to take advantage of the composite license. "LIC is looking at organic as well as inorganic growth opportunities.
Life insurance companies reported a 17 per cent year-on-year (YoY) drop in new business premium (NBP) in February as state-owned Life Insurance Corporation of India's premiums contracted 32 per cent during this period on account of a drop in its group single premium segment. According to data released by the Life Insurance 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.
Insurance agents of all life insurance companies selling unit linked insurance plans will now show rate of returns ranging between 6 and 10 per cent to customers.
As of March 25, life insurers have paid Rs 1,986 crore towards 25,500 Covid death claims
The insurance regulator IRDA on Monday said it is mulling to follow the lead insurance model based on geography, which is presently followed by the banking industry known as 'lead banking model'.
The Life Insurance Council has made a representation to the Insurance Regulatory Development Authority (Irda), seeking some revisions pertaining to unit-linked products.
Move seen as countering fund houses' plan to sell life covers.
Insurance industry emerged as the largest investor in the stock market during 2007-08 surpassing the foreign institutional investors, riding on the huge popularity of Unit Linked Insurance Products, according to Life Insurance Council.
In the last few years, unit-linked insurance plans (Ulips) have quietly become one of the largest players in the Indian stock market. With a total investment estimated at Rs 1.5 lakh crore to Rs 2 lakh crore, they are almost close to the investment made by equity mutual funds.
"Earlier, India was a land of snake charmers. Now, Americans perceive Indians to be very smart. The infotech revolution changed it all," says FICCI Secretary-General Amit Mitra.
Data released by the Life Insurance Council reveals that the total pension premium for the life insurance industry saw a growth of 159 per cent at Rs 22,268 crore (Rs 222.68 billion) for FY07 compared with Rs 8,568 crore (Rs 85.68 billion) in FY06.
India has received nearly Rs 30,000 crore worth of FDI in the private sector insurance firms since 2015, when the government had increased FDI limit from 26 per cent to 49 per cent. Investment under the automatic route does not require prior approval from the government.
Section 45, which says no claim can be rejected after three years of a policy being in force, remains a bone of contention
This question remains unanswered most of the time due to lack of knowledge or guidance. No more!
Section 45 in the new Bill says no claim can be repudiated after three years of the policy being in force, even if a fraud is detected, has sent life insurers into a tizzy.
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