How life insurance delivered in January 2023?

10 Feb 2023 , 09:43 AM

In terms of yoy growth in new business, private insurers dominated at 23.3% even as the LIC lagged  behind at 18.3%. However, if you look at growth on a cumulative basis for the last one year, then LIC growth has been much better at 37.7% while the growth in private insurers business has lagged behind at 18.2%. Here are some key points that emerge from the latest monthly published by IRDAI.

Key readings from new business numbers of life insurance for January 2023

1. LIC has lagged the overall private insurance growth in January 2023 but continues to remain dominant for the cumulative annual period. For instance, for January 2023, the LIC business grew at just 18.3% while private insurers grew at 23.3%. On a cumulative basis, however, LIC dominated the show with growth of 37.7% against just 18.2% for the private insurers. 

    

2. The market share of LIC has dipped slightly in the month of January 2023. For LIC, the monthly market share of new business on a cumulative business has fallen further to 64.7% and it was above 67% just a couple of months back. On the other hand, the private insurers on a cumulative basis have seen their market share increase to 35.3%. The growth in private insurer market share has been more than 300 bps and the same was largely driven by sharp growth in individual single and non-single premiums. All the above market shares are based on cumulative premiums.

    

3. The overall life insurance new premium income for January 2023 stood at Rs26,424 crore, which is nearly 20.3% higher on MOM basis. On a cumulative basis, the total premiums from new policies were up over 30%. Out of this overall premium income basket, LIC accounted for Rs15,302 crore and private life insurers Rs11,122 crore. On a cumulative basis for FY23, LIC saw fall in its market share from 65.38% to 64.71%; albeit still very impressive.

    

4. How about the premium mix of LIC and the private insurers in FY23? LIC had a market share of 80.73% in group single premium and 97.42% in group non-single premium. LIC virtually dominates the group life cover space which can be attributed to its strong corporate and institutional relationships. However, when it comes to the individual non-single premiums, private insurers had a market share of 65.93% and even in individual single premium, their market share was an impressive 44.62%.

    

5. However, the situation is starkly different if you look at sum assured. Here private life insurers have an overall market share of 83.66% while LIC only has 16.34% market share overall. This can be attributed to private life insurers selling more of pure risk term covers where the ratio of sum assured to premium is higher. LIC, on the other hand, is focused on endowments, money-backs and ULIPs. 

For LIC, the bigger challenge would be to ensure that this strong performance also reflects in stock prices, something that has been missing. 

Life premium collections for January 2023

Here are premiums across life insurers for January 2023 and for the first 10 months of FY23 on a cumulative basis till January 2023.

Insurer Category	Jan 2022	Jan 2023	Growth %	Jan-22 YTD	Jan-23 YTD	Growth %	Share
Private Total	9020.75	11121.98	23.29	88237.60	104310.81	18.22	35.29
Individual Single Premium	1354.64	1672.17	23.44	13128.46	15659.86	19.28	44.62
Individual Non-Single Premium	4722.50	5378.65	13.89	40111.38	47333.42	18.00	65.93
Group Single Premium	2364.33	3267.29	38.19	29436.20	33985.18	15.45	19.27
Group Non-Single Premium	14.07	5.98	-57.46	289.95	115.79	-60.07	2.58
Group Yearly Renewable Premium	565.21	797.89	41.17	5271.60	7216.56	36.90	92.01
LIC of India	12936.28	15301.67	18.28	138951.30	191303.44	37.68	64.71
Individual Single Premium	1926.64	2251.11	16.84	18597.90	19440.09	4.53	55.38
Individual Non-Single Premium	2832.72	2892.43	2.11	21987.31	24464.37	11.27	34.07
Group Single Premium	7903.75	9840.45	24.50	95235.35	142393.66	49.52	80.73
Group Non-Single Premium	206.71	219.50	6.19	2115.69	4378.42	106.95	97.42
Group Yearly Renewable Premium	66.45	98.18	47.75	1015.04	626.90	-38.24	7.99
Grand Total	21957.03	26423.65	20.34	227188.89	295614.25	30.12	100.00
Individual Single Premium	3281.28	3923.28	19.57	31726.37	35099.95	10.63	100.00
Individual Non-Single Premium	7555.23	8271.08	9.47	62098.69	71797.79	15.62	100.00
Group Single Premium	10268.08	13107.74	27.66	124671.55	176378.84	41.47	100.00
Group Non-Single Premium	220.78	225.48	2.13	2405.64	4494.21	86.82	100.00
Group Yearly Renewable Premium	631.66	896.07	41.86	6286.65	7843.47	24.76	100.00

Data Source: IRDAI

Once again, in January 2023, private sector insurers scored over LIC, but LIC still dominates on FY23 cumulative basis. LIC has predominant focus on group policies, which constitute 66.3% of their overall premium flows. Premium growth for LIC has been lower than private insurers, but LIC has been an outperformer on a cumulative basis. 

How the sum assured story looks like in January 2023

Here is sum assured across life insurers for January 2023 and for the cumulative first 10 months of fiscal year FY23.

Insurer Category	Jan 2022	Jan 2023	Growth %	Jan-22 YTD	Jan-23 YTD	Growth %	Share
Private Total	483275.62	634695.49	31.33	3815710.09	4633981.85	21.44	83.66
Individual Single Premium	2233.73	1825.80	-18.26	19367.60	17081.46	-11.80	55.59
Individual Non-Single Premium	130948.89	144997.68	10.73	1124523.30	1193178.92	6.11	71.55
Group Single Premium	123575.32	143270.37	15.94	1036481.48	1251158.76	20.71	99.93
Group Non-Single Premium	11145.47	39438.82	253.86	179398.95	160714.56	-10.41	89.91
Group Yearly Renewable Premium	215372.22	305162.81	41.69	1455938.76	2011848.16	38.18	83.48
LIC of India	88816.94	164616.34	85.34	788353.63	905263.16	14.83	16.34
Individual Single Premium	1640.55	1250.36	-23.78	14768.33	13644.83	-7.61	44.41
Individual Non-Single Premium	65257.33	59653.25	-8.59	442475.67	474470.17	7.23	28.45
Group Single Premium	104.49	49.05	-53.05	734.32	887.68	20.88	0.07
Group Non-Single Premium	2355.41	1670.38	-29.08	15280.45	18040.46	18.06	10.09
Group Yearly Renewable Premium	19459.17	101993.30	424.14	315094.86	398220.02	26.38	16.52
Grand Total	572092.57	799311.83	39.72	4604063.72	5539245.01	20.31	100.00
Individual Single Premium	3874.27	3076.16	-20.60	34135.93	30726.29	-9.99	100.00
Individual Non-Single Premium	196206.23	204650.93	4.30	1566998.96	1667649.09	6.42	100.00
Group Single Premium	123679.81	143319.42	15.88	1037215.81	1252046.44	20.71	100.00
Group Non-Single Premium	13500.87	41109.20	204.49	194679.40	178755.02	-8.18	100.00
Group Yearly Renewable Premium	234831.38	407156.11	73.38	1771033.62	2410068.17	36.08	100.00

Data Source: IRDAI

When it comes to sum assured, private insurers clearly have an edge in terms of market share at 83.66%. LIC is building on its term policy sales, but it still has a long way to catch up on sum assured rankings due to its traditional focus on endowments and cash backs. The good news is that, LIC saw its sum assured for January 2023 grow by 85.3% yoy even as private insurers grew by just 31.3%. On a cumulative basis for FY23, LIC grew sum assured by just 14.8% while private insurers grew sum assured by 21.4% yoy.

Fact check on individual private insurance players

For January 2023, the total new business premium of private insurers grew by 23.3% at Rs11,122 crore. Out of these private players, the top 8 insurers in the order of January 2023 premium collections were SBI Life, HDFC Life, ICICI Prudential Life, Kotak Mahindra Life, Bajaj Allianz, Tata AIA, Max Life and Aditya Birla Sun Life. These 8 players accounted for 87.2% of premium collections. This ratio has bounced sharply and could be attributed to the bounce-back in premium income of Bajaj Allianz, Kotak Mahindra Life and Aditya Birla Sun Life. The month of January 2023 has proven that private insurers are giving LIC a tough fight in the market.