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Life insurance new business story for March 2023 and FY23

21 Apr 2023 , 10:06 AM

However, when you look at the overall new insurance business for the full fiscal year FY23, it is actually positive and also there is growth across LIC and the private life insurance players. The monthly new business numbers of life insurers were announced by the Life Insurance Council fairly late for the month of March 2023.

Grasping the big picture on new life insurance business in March 2023

New business premium (NBP) for life insurance as a whole fell by -12.6% in March 2023, led by a -32.14% fall in NBP for LIC. This is surprising, since the last quarter is considered to be a busy quarter for the life insurance business due to the tax implications. One possibility is that the new tax regime could have dampened the demand for long-term life insurance commitment due to limited applicability of Section 80C for large chunks of the lower and middle income groups. However, it was not just a fall in the new business premiums, but also a -12.5% fall in the number of policies sold. Clearly, in the last quarter, LIC has seen its insurance business under pressure, as it ceded a greater share to private players.

Key NBP readings for March 2023 and for FY23

We look at the new business premium (NBP) collections for March 2023 on a yoy basis and also the cumulative NBP numbers for the full financial year FY23. Here is a granular look.

PARTICULARS	Mar-23 Month	Mar-22 Month	Growth (%) YOY	FY23 Full Year	FY22 Full Year	Growth (%) YOY
PRIVATE SECTOR TOTAL	23,365	17,290	35.14%	1,38,644	1,15,503	20.04%
Individual Single Premium	2,250	2,357	-4.57%	19,443	17,066	13.93%
Individual Non-Single Premium	13,635	8,665	57.36%	66,434	53,370	24.48%
Group Single Premium	6,347	5,090	24.71%	43,749	37,619	16.29%
Group Non-Single Premium	26	45	-41.30%	161	401	-59.79%
Group Yearly Renewable Premium	1,106	1,133	-2.31%	8,856	7,046	25.70%

LIC OF INDIA TOTAL	28,716	42,319	-32.14%	2,31,899	1,98,760	16.67%
Individual Single Premium	4,278	4,018	6.47%	25,624	24,806	3.30%
Individual Non-Single Premium	6,078	5,501	10.49%	33,015	30,016	9.99%
Group Single Premium	17,749	30,053	-40.94%	1,67,235	1,37,350	21.76%
Group Non-Single Premium	460	2,577	-82.14%	5,181	5,249	-1.30%
Group Yearly Renewable Premium	151	170	-11.43%	844	1,339	-36.98%

TOTAL LIFE INSURANCE	52,081	59,609	-12.63%	3,70,543	3,14,262	17.91%
Individual Single Premium	6,528	6,376	2.39%	45,067	41,872	7.63%
Individual Non-Single Premium	19,713	14,166	39.16%	99,449	83,386	19.26%
Group Single Premium	24,096	35,143	-31.43%	2,10,984	1,74,969	20.58%
Group Non-Single Premium	487	2,622	-81.44%	5,342	5,650	-5.45%
Group Yearly Renewable Premium	1,257	1,303	-3.50%	9,700	8,385	15.69%

Data Source: Life Insurance Council, IRDAI

Here are some of the key takeaways from the NBP numbers for March 2023 and the cumulative picture for FY23.

For March 2023, new business premiums (NBP) of LIC contracted by -32.14% even as the NBP of private life insurers expanded by 35.14%. The overall premiums for the life insurance sector contracted -12.63%.
On a cumulative basis, for the full financial year FY23 ending March 2023, the new business premiums (NBP) of LIC grew 16.7% even as the NBP of private life insurers also expanded by 20.04%. The cumulative premiums for the life insurance sector overall expanded by 17.9%.
If one looks at the March 2023 data for LIC and compares on a yoy basis, there was contraction in NBP across 3 out of the 5 categories viz. group single premium, group non-single premium and group yearly renewable premium. However, there was positive growth in NBP shown by LIC in individual single premium and individual non-single premium policies. LIC is normally strong in the group premium segment, so this is a reversal. Private insurers saw 57.36% growth in individual non-single premium NBP and 24.7% in group single premium, while the other categories witnessed contraction.
If we look at the cumulative picture of FY23 for LIC and compare on a yoy basis, there was expansion in NBP across individual single premium, individual non-single premium, and group single premium categories. However, there was contraction group non-single premium and group renewable premium categories for FY23. Private insurer saw expansion in all categories except group non-single premium. Overall, there was contraction only in group non-single premium category while all the other 4 categories saw NBP expansion in FY23.
Let us finally look at premium share. For the month of March 2023, out of the total life insurance NBP of Rs52,081 crore, LIC accounted for Rs28,716 crore (55%) and private life insurers accounted for Rs23,365 crore (45%). For the cumulative financial year FY23 up to March 2023, out of the total life insurance NBP of Rs370,543 crore, LIC accounted for Rs231,899 crore (62.6%) and private life insurers accounted for Rs138,644 crore (37.4%).

For fiscal year FY23, the LIC share of new business premium (NBP) has been consistently falling and is now hovering around the 62-63% mark, one of the lowest levels it has seen. As stated earlier, the sharply lower numbers can be attributed to the New Tax Regime, where exemptions are done away with and that would take away one of the most important selling points used by LIC agents and feet-on-street in the life insurance business.

What we read about number of policies sold in March 2023

Having seen new business premium (NBP) collections for March 2023 and for FY23, let us turn to the number of policies sold. That is normally a better picture of retail spread. We will also look at the number of policies sold on a cumulative basis by LIC and private insurers.

PARTICULARS	Mar-23 Month	Mar-22 Month	Growth (%) YOY	FY23 Full Year	FY22 Full Year	Growth (%) YOY
PRIVATE SECTOR TOTAL	12,46,028	11,35,324	9.75%	80,52,126	74,00,213	8.81%
Individual Single Premium	46,051	49,041	-6.10%	2,80,544	2,94,429	-4.72%
Individual Non-Single Premium	11,98,930	10,85,667	10.43%	77,65,353	71,01,332	9.35%
Group Single Premium	239	204	17.16%	1,232	1,146	7.50%
Group Non-Single Premium	21	28	-25.00%	234	209	11.96%
Group Yearly Renewable Premium	787	384	104.95%	4,763	3,097	53.79%

LIC OF INDIA TOTAL	40,56,406	49,00,661	-17.23%	2,04,65,055	2,17,54,965	-5.93%
Individual Single Premium	1,65,033	1,81,957	-9.30%	10,04,285	9,94,754	0.96%
Individual Non-Single Premium	38,87,569	47,14,062	-17.53%	1,94,24,652	2,07,23,941	-6.27%
Group Single Premium	26	54	-51.85%	704	567	24.16%
Group Non-Single Premium	1,326	1,829	-27.50%	6,283	7,953	-21.00%
Group Yearly Renewable Premium	2,452	2,759	-11.13%	29,131	27,750	4.98%

TOTAL LIFE INSURANCE	53,02,434	60,35,985	-12.15%	2,85,17,181	2,91,55,178	-2.19%
Individual Single Premium	2,11,084	2,30,998	-8.62%	12,84,829	12,89,183	-0.34%
Individual Non-Single Premium	50,86,499	57,99,729	-12.30%	2,71,90,005	2,78,25,273	-2.28%
Group Single Premium	265	258	2.71%	1,936	1,713	13.02%
Group Non-Single Premium	1,347	1,857	-27.46%	6,517	8,162	-20.15%
Group Yearly Renewable Premium	3,239	3,143	3.05%	33,894	30,847	9.88%

Data Source: IRDAI

Here are some key takeaways from the new policy sales numbers for March 2023. Like in February 2023, even in March, it is LIC that has seen a contraction in new policies issued in the month and for the FY23 full financial year. For March 2023, new policies issued contracted by 12.15% to 53.02 lakh policies overall. Out of that LIC saw -17.2% contraction in policies while private sector insurers saw life policies grow by 9.75% in March 2023.

For the cumulative FY23 picture, total new policies issued were marginally lower by -2.19%. However, private insurers saw growth of 8.81% while LIC saw contraction in number of policies issued by -5.93%. Overall, LIC has seen a contraction of retail volumes in terms of number of policies in the current fiscal overall. Clearly, it looks like the private players are slicing away a bigger market share from the public sector insurer.

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