LIC’s knock-on effect: Insurers’ new business premium drops 12.6%

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.

While private life insurance companies reported healthy growth of over 35 per cent in NBP during this period to Rs 23,364 crore, aided by a 57 per cent jump in individual non-single premiums and a 24 per cent uptick in group single premiums, state-owned LIC saw its premium dip 32 per cent to Rs 28,716 crore. In the year-ago period, LIC had earned premiums of Rs 42,319.22 crore.

In January, the industry reported a 20 per cent jump in premiums, assisted by private sector companies’ performance (23 per cent YoY growth), while LIC saw its premium go up 18 per cent YoY.

February saw the NBP of insurers dropping 17 per cent over the same period last year due to a fall in LIC premiums, while the private sector saw its premium go up 10 per cent.