With over two dozen private sector life insurers, the market share of state run behemoth Life Insurance Corporation of India (LIC) declined for a second consecutive year in 2018-19, though it continued to enjoy the lion’s share.

On the basis of total premium income, the market share of LIC decreased to 66.42 per cent in 2018-19 from 69.36 per cent in 2017-18, according to data released by the Insurance Regulatory and Development Authority of India (IRDAI) in its Annual Report.

The market share of private insurers rose to 33.58 per cent last fiscal as against 30.64 per cent in 2017-18.

LIC’s market share in terms of total premium income fell to less than 70 per cent in 2017-18 with private insurers becoming more aggressive in terms of sales. In 2016-17, LIC enjoyed a market share of 71.81 per cent in this category, according to IRDAI data.

Last fiscal, LIC’s market share in new business premium fell to 66.20 per cent from 69.36 per cent a year ago, while its market share in renewal premium also declined to 66.58 per cent.

Bouncing back

However, LIC has begun to regain the market share this fiscal, which stood at 71 per cent by November 30 this year.

Analysts have also noted that LIC posted a sharp recovery in November with a 44. 53 per cent growth in the number of policies sold between April and November this year. “Notable trends in November include 138 per cent year-on-year growth in individual policy count of LIC — this could be driven by the successful foray in protection which is also leading to a continuous decline in ticket size for LIC,” said a report by ICICI Securities, adding that its share in total annualised premium equivalent (APE) has increased to 63 per cent in the eight months of this fiscal from 48 per cent a year ago.

Noting that LIC almost doubled its individual APE in November after a 6 per cent growth in October and a decline in September, a report by Kotak Institutional Equities said, “LIC agents seem to have pushed their paddle hard since it was the sunset month for some of LIC’s popular products — Jeevan Lakshya , Jeevan Umang and Jeevan Labh (all three par products). These products are being re-priced. We would expect weakness in its growth here on.”

LIC, in a statement earlier this year, had also stressed on its strong financial health and had said that by August 31, 2019, it had regained its market share for policies to 72.84 per cent and for first-year premium to 73.06 per cent.

Overall growth trends

According to the IRDAI report, the life insurance industry recorded premium income of Rs 5.08 lakh crore last fiscal, with a growth of 10.75 per cent, as against 9.64 per cent growth in 2017-18.

However, the general insurance industry underwrote total direct premium of Rs 1.69 lakh crore last fiscal with a growth of 12.47 per cent, which was lower compared to 17.59 per cent growth in 2017-17.

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