The life insurance industry registered a 25.28% dip in new business premium income in November 2023, which stood at Rs 26,494.83 crore as compared to Rs 34,588.8 crore recorded during the same period in 2022.
The plunge in group premiums and change in taxation guidelines for policies with a higher ticket size affected the premiums of the state-run Life Insurance Corporation of India (LIC) and private insurers, respectively.
As per the data released by the Life Insurance Council, the premium of private insurers dipped to 9.33% on a year-on-year (YoY) to Rs 10,360.29 crore from Rs 11,426.73 crore as a result of a change in product mix due to the measures introduced to control the impact of tax imposed on the premiums of Rs 5 lakh.
Meanwhile, LIC’s premiums dipped by 32.86% to Rs 16,134.55 crore from Rs 24,032.07 crore, which was driven by a decline in group premiums.
The group premium of LIC dipped by 37.48% to Rs 11,649.54 crore in the reported month from Rs 18,635.93 crore. The slip in the business has affected the overall group premium of the industry which plunged by 34.02% to Rs 14,735.49 crore from Rs 22,334.95 crore across the time period.
As per experts, the majority of the fall has been in the group premiums, both single and non-single. LIC generally dominates the group segment. A dip in their business will affect the entire industry numbers.
Experts state that the underlying theme that is running through the entire life insurance segment for the current year is the change in taxation norms. There could have been a change in the product mix to accommodate this, which has influenced the private insurance players (insurers).
The individual single premium of the insurance companies dipped by 14.81% to Rs 3,322.48 crore from Rs 3,900.04 crore in the time period under consideration. On the other hand, the private insurers experienced a dip of 18.93% premium in the space to Rs 1,395.1 crore as compared to Rs 1,720.81 crore across the time period.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.
