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The first year premium of life insurers declined 7 per cent at ₹2,50,274 crore up to December 2023 in the current financial year compared with ₹2,69,190 crore in the same period last year mainly on account of decrease in group premium, according to data of Insurance Regulatory and Development Authority of India (IRDAI).
The first year premium of private life insurers, however, grew by 10.4 per cent while that of Life Insurance Corporation declined by 16.1 per cent.
The total first year premium of private life insurers stood at ₹1,02,868 crore as on December 2023 while it was at ₹1,47.405 crore. Overall, group non-single premium had a significant fall of 44.9 per cent which had impacted the overall performance in the industry.
However, for the full year, things may look up for life insurers as bucking the declining trends, December month business registered strong growth. First-year life insurance premiums surged a robust 43.8 per cent against an increase of 9.7 per cent in the year-ago period.
According to a senior official of IRDAI, the growth momentum in the overall life insurance industry will be maintained in the current financial year too.
- Also read: Signs of market failure in life insurance
During 2022-23, the life insurance industry recorded premium income of ₹7.83-lakh crore registering 12.98 per cent growth. The private sector life insurers have clocked a growth of 16.34 per cent in premium, while the public sector life insurer recorded 10.90 per cent growth in premium.
Renewal premium continues to contribute the majority of total premium underwritten by life insurers in 2022-23 at 52.56 per cent. The balance 47.44 per cent is contributed by the new business premium. However, the growth in new business premium was higher at 17.90 per cent compared with renewal business at 8.88 per cent.
- Also read: More than half of complaints against Pvt life insurers are on unfair business practices: IRDAI
Single premium products continue to play a major role for the public sector with a contribution of 40.65 per cent of its total premium while it was 22.20 per cent for private life insurers.
“We expect the overall growth in the insurance business in the current fiscal year will almost be similar to what it was last year,’‘ the official said.
Life insurance segment constitutes 77 per cent of total life insurance premium followed by pension and annuity segments together about 23 per cent.
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