Life Insurers Witness Nearly 12% Growth in Sale of Policies in Q1 FY25

Life insurance companies in India have witnessed a significant growth in their first-year premium in the April-June period of the current financial year (FY25). According to 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 Rs 89,726.7 crore in Q1 FY25 from Rs 73,004.87 crore in Q1 FY24.

The Life insurance Corporation of India (LIC), the market leader in the industry, recorded a remarkable 28.11 per cent growth to Rs 57,440.9 crore in the three-month period ended June 30, 2024. This growth was primarily driven by an increase in group premium, with LIC seeing a 33.49 per cent rise in its Group Single premium to Rs 44,671.86 crore in the April-June quarter of FY25.

Private life insurers also performed well, with a 14.62 per cent Y-o-Y improvement in their premium to Rs 32,285.8 crore from Rs 28,167.66 crore. This growth was supported by healthy performance in the individual segment.

Saurabh Bhalerao, associate director at CareEdge Ratings, attributed the growth in Life insurance premium to factors such as the low base effect, increased insurance coverage, and an increase in single premium. He mentioned that individual single premiums saw decent growth in the quarter, and predicted that premiums are likely to grow by nearly 13 per cent in FY25.

Among the private sector insurers, SBI Life insurance recorded a 13 per cent growth in premium to Rs 7,032.69 crore, while ICICI Prudential Life insurance saw a 23.5 per cent growth to Rs 3,768.55 crore. Other major players such as HDFC Life, Bajaj Allianz Life insurance, and Max Life insurance posted growth rates of 9.19 per cent, 17.78 per cent, and 11.87 per cent, respectively.

In terms of market share, LIC maintained its dominance with a 64 per cent share in the quarter ended June 30, 2024, compared to 61.4 per cent in the same period last year. Private insurance companies accounted for 35.9 per cent of the NBP, down from 38.6 per cent in the previous year.

Overall, the life insurers posted nearly 12 per cent growth in the sale of policies in the period under consideration. In June 2024, the premium of insurers increased by 14.80 per cent Y-o-Y to Rs 42,433.7 crore, with LIC posting a 13.60 per cent Y-o-Y growth to Rs 28,366.9 crore, and private insurers clocking a 17 per cent Y-o-Y growth in premium to Rs 14,066.8 crore.

The positive growth trends in the Life insurance sector indicate a growing demand for insurance products among Indian consumers, driven by factors such as increased awareness, rising incomes, and a focus on financial security. As the industry continues to evolve, insurers are expected to introduce innovative products and services to cater to the evolving needs of customers.