How did life insurance companies perform in October 2022?

10 Nov 2022 , 09:41 AM

The data again seems to be showing a very creditable performance by LIC while the private insurers saw yoy growth that was lower than LIC in terms of premiums collected. However, the positivity is yet to reflect in the stock price of LIC. Here are some key points that emerge from the latest monthly report put out by IRDAI.

Key takeaways from Life Insurance new business numbers for October 2022

a)      LIC dominates the life insurance market in October 2022 also, and it has actually sustained its market share in the last one year amidst a tightly competitive market. The market share of LIC in total premium income for October 2022 is lower by 100 bps at 67.72% compared to 68.72% in September 2022. Private sector insurers marginally improved their share in the quarter. The premium income for October 2022 was nearly lower by a third at Rs24,917 crore overall, of which LIC accounted for Rs15,920 crore and private life insurers Rs8,996 crore. On a 7-months cumulative basis for FY23, LIC has a market share of 67.72%; still quite impressive.

b)      Let us now turn to the mix of premiums collected in October 2022. LIC had a market share of 82.58% in group single premium and 96.96% in group non-single premium. LIC virtually dominates the group life cover space due to its strong corporate and institutional relationships. However, in individual non-single premiums, private insurers had a market share of 64.19% and even in individual single premium, their market share was an impressive 44.38%. This market share pertains to the cumulative for the first 7 months of FY23.

c)      However, the situation changes drastically if you look at sum assured. Here the private life insurers have an overall market share of 83.43%. That is due to private life insurers selling more of pure risk term covers where the ratio of sum assured to premium is higher. LIC, due to its predominant focus on endowments, money-backs and ULIPs, has a lower market share of sum assured since its products are more of savings cum insurance products and not pure term covers.

d)      Growth in premiums is where LIC scores really high in October 2022, like it did in the previous months. The industry growth in premiums for October 2022 over October 2021 was 15.32%. However, the private life insurers saw premium growth of just 10.99% while LIC saw premium growth of 17.92%. LIC has seen a positive thrust to its business since July 2022, although absolute numbers in October are lower than September.

e)      Monthly growth may be slightly misleading, so we also look at cumulative growth for 7 months of FY23. Overall insurance premium collections were up 34.71% yoy. However, private life insurers saw growth of just 21.48% in the 7 months to October 2022 while the growth in premium collections of LIC was an impressive 42.08%. LIC has dominated October 2022 in terms of monthly and cumulative FY23 growth.

Clearly, LIC appears to be getting its act together rapidly, even as private insurers are struggling from the internecine competition. LIC continues to gain from its strong franchise in the group insurance policies.

Our reading of life premium collections for October 2022

Here are premiums across life insurers for October 2022 and for the first 7 months of the fiscal year FY23 on a cumulative basis.

Insurer Category	Oct 2021	Oct 2022	Growth %	Oct-21 YTD	Oct-22 YTD	Growth %	Share
Private Total	8105.46	8996.45	10.99	54974.76	66782.31	21.48	32.28
Individual Single Premium	1311.30	1344.38	2.52	8591.55	10083.44	17.36	44.38
Individual Non-Single Premium	3952.63	4069.17	2.95	24356.77	28709.28	17.87	64.19
Group Single Premium	2400.69	3040.27	26.64	18225.62	22773.74	24.95	17.42
Group Non-Single Premium	10.85	7.88	-27.35	138.71	97.65	-29.61	3.04
Group Yearly Renewable Premium	430.00	534.75	24.36	3662.10	5118.21	39.76	92.92
LIC of India	13500.78	15920.13	17.92	98613.38	140111.20	42.08	67.72
Individual Single Premium	2372.93	1868.85	-21.24	12473.51	12639.75	1.33	55.62
Individual Non-Single Premium	2166.72	2301.30	6.21	13971.98	16014.10	14.62	35.81
Group Single Premium	8529.97	11072.20	29.80	70271.31	107950.40	53.62	82.58
Group Non-Single Premium	324.89	620.51	90.99	1130.31	3116.70	175.74	96.96
Group Yearly Renewable Premium	106.27	57.27	-46.11	766.27	390.26	-49.07	7.08
Grand Total	21606.25	24916.58	15.32	153588.14	206893.52	34.71	100.00
Individual Single Premium	3684.23	3213.23	-12.78	21065.06	22723.19	7.87	100.00
Individual Non-Single Premium	6119.35	6370.47	4.10	38328.76	44723.38	16.68	100.00
Group Single Premium	10930.66	14112.47	29.11	88496.93	130724.14	47.72	100.00
Group Non-Single Premium	335.75	628.39	87.16	1269.02	3214.34	153.29	100.00
Group Yearly Renewable Premium	536.26	592.02	10.40	4428.37	5508.47	24.39	100.00

Data Source: IRDAI

While LIC showed strong growth traction in October 2022, it is still focussed on group policies, which constitute 82.58% of their overall premium flows. Even in this high growth period, LIC reported flat to negative growth in individual premium collections. In the case of the private sector players, the growth has been mildly positive in the individual policies but sharply negative in group non-single premium categories. Even on an overall basis, the individual single premium policies showed negative growth in October 2022.
 
What we read from the sum assured numbers for October 2022

Here is sum assured across life insurers for October 2022 and for the first 7 months of the fiscal year FY23.

Insurer Category	Oct 2021	Oct 2022	Growth %	Oct-21 YTD	Oct-22 YTD	Growth %	Share
Private Total	352744.15	418389.98	18.61	2441373.05	2966060.38	21.49	83.43
Individual Single Premium	1802.95	1448.12	-19.68	12427.40	11263.07	-9.37	55.31
Individual Non-Single Premium	97324.65	103640.49	6.49	693401.55	740495.26	6.79	71.00
Group Single Premium	113458.73	129555.48	14.19	668731.87	820412.09	22.68	99.93
Group Non-Single Premium	8745.63	11134.22	27.31	145622.22	99922.59	-31.38	90.09
Group Yearly Renewable Premium	131412.20	172611.67	31.35	921190.00	1293967.37	40.47	82.96
LIC of India	83662.32	79398.42	-5.10	545383.35	588881.98	7.98	16.57
Individual Single Premium	1831.18	1250.66	-31.70	9739.41	9099.05	-6.57	44.69
Individual Non-Single Premium	46082.58	39393.82	-14.51	263071.02	302467.24	14.98	29.00
Group Single Premium	61.13	42.34	-30.73	399.55	610.31	52.75	0.07
Group Non-Single Premium	1158.25	2015.54	74.02	9593.56	10990.06	14.56	9.91
Group Yearly Renewable Premium	34529.19	36696.06	6.28	262579.80	265715.32	1.19	17.04
Grand Total	436406.47	497788.40	14.07	2986756.40	3554942.36	19.02	100.00
Individual Single Premium	3634.13	2698.78	-25.74	22166.82	20362.12	-8.14	100.00
Individual Non-Single Premium	143407.23	143034.31	-0.26	956472.57	1042962.51	9.04	100.00
Group Single Premium	113519.86	129597.82	14.16	669131.43	821022.41	22.70	100.00
Group Non-Single Premium	9903.87	13149.76	32.77	155215.79	110912.64	-28.54	100.00
Group Yearly Renewable Premium	165941.38	209307.73	26.13	1183769.80	1559682.69	31.76	100.00

Data Source: IRDAI

When it comes to sum assured, private insurers clearly appear to have an edge in terms of market share at 83.43%. LIC is building on its term policy sales, but it still has a long way to catch up on sum assured rankings with the private insurers. In fact, October 2022 has been disappointing for LIC since it saw its sum assured contract by nearly -5.1% on a yoy basis.

Private life insurers; and their October 2022 performance

Out of the 23 private life insurance players, the top 7 insurers viz. SBI Life, HDFC Life, ICICI Prudential Life, Aditya Birla Sun Life, Kotak Life, Bajaj Allianz and Max Life accounted for 80.91% of premium collections. This ratio has bounced sharply and could be attributed to the bounce-back in premium income of Bajaj Allianz. For October 2022, highest premium growth was visible for Tata AIA Life and Star Union Dai-ichi, with most of the other leading players seeing contraction in premium income on a yoy basis or growth in the sub-20% range.