First year premium of life insurance increased Nearly double from Rs 24,480 crore in May 2022 According to the report of Care Age Ratings, Rs 12,977 crore in the same month last year. The year-on-year growth in first-year premium numbers was 86.7%. The strong performance was driven by strong growth in group single premiums. The country’s largest insurer, LIC, outperformed its private peers for two consecutive months in FY 2013, meanwhile, private insurers saw a rapid growth in May this year.
Also, growth was led by a lower base, which saw lower levels due to the pandemic-induced (Covid-19 second wave) lockdown.
First year premium in April this year life insurance the numbers were 17,940 crores.
CARE’s data showed that LICThe first year premium of the U.S. continued to grow at strong double digits and stood at 77% for May 2022, down from a growth of 141.2% in April 2022, but from a growth of 50.6% in March 2022 and 35.4% in March 2022. was more. February 2022. The May 2022 growth due to group single premium also compares favorably to the 12.4% decrease (base effect/lockdown disruption) in May 2021.
Meanwhile, the data highlights that private insurers grew by 114.4% in May 2022 versus 27.5% in April 2022, 12.9% in March 2022 and 14.2% (base effect/lockdown disruption) in April 2021.
In the first two months of FY13, CARE data showed that LIC has surpassed the marginal growth reported for the same period of FY12 and its private peers replaced LIC as the head of the group single insurance business. part has been given. LIC maintains its major share in the first year premium at 65% versus 35% share of private companies.
Further, in May 2022, non-premium grew by 106.4%, while single premium also registered a strong growth of 82.2%.
Notably, the share of single premium has increased from 60% for FY 2010 to 69% in FY 2012 and 71% in April-May 2022 period of FY 2012.
In single premium, the increase can be attributed to individuals who want an estimated rate of return. Pension plans, common annuities and group gratuity plans account for a significant portion of the group, while general annuity plans dominate individual single premiums, according to Care.
The non-single premium sub-segment (primarily individual premiums) is dominated by the private sector, while LIC dominates the single premium sub-segment, especially the group business, the CARE report said.
During May this year, group premiums grew by 92.2%, while individual premiums grew by 82%. So far in FY23, growth in group premiums has been outpacing growth in individual premiums. Meanwhile, individual premiums remain smaller in size than group premiums.
In the research report, CARE expects the life insurance industry to continue to grow at around 12-14% over a period of three to five years. The growth will be driven by strong demand for annuity and protection plans. Meanwhile, the growth in ULIPs may be curtailed considering the market volatility.
As per the CARE report, other factors include a rapid push to increase insurance coverage, especially in the rural population, product innovations/adaptations, and distribution channels being linked with digital infrastructure for easier user interaction. . However, frauds, defaults ratio, any unfavorable changes in macro-economic factors, and uncertainties in the regulatory landscape can be described as major challenges to the growth of the industry. Overall, the outlook is expected to be positive in the medium term.