- In March 2023, individual non-single premiums for all private players amounted to ₹13,635.21 crore, which is a 57.35% increase compared to March 2022.
- During the month of March, the
life insurance industry's premium decreased by 12.6%. - There was a 12.2% Y-oY andecline in the number of policies sold.
In March 2023, individual non-single premiums for all private players amounted to ₹13,635.21 crore, which is a 57.35% increase compared to ₹8,665.05 crore in March 2022.
Further, on the back of a strong March, private insurers reported an individual Annualized Premium Equivalent (APE) growth of 24% Y-o-Y in FY23. “The spike in demand was driven by withdrawal of tax sops,” says the India Insurance Report by HSBC Global Research. In budget 2023-24, the government suggested that income from all non-ULIP products, will be taxed if the aggregate insurance premium paid in a year exceeds Rs 5 lakh. This would have led people to rush and buy such policies so that one could still get the benefit of the tax sop.
“Typically, Indians rush to finish their tax savings in the last month, and the rise in new business premiums (NBP) reflects this reality. If we look at the data across the private life insurance players, we can find that NBP in non-single premium policies—which is a classic policy—has increased dramatically. Apart from tax season, I don't see any major explanation for such a jump in NBP, given some of the other categories, such as individual single premiums and group non-single premiums, have had drops in NBP for the month of March,” says Rakesh Goyal Director Probus Insurance Broker.
New business premium refers to first-year premiums on regular premium plans as well as single premiums on new business written at any time for both individual and group customers.
Despite private sector life insurance companies reporting a strong 35.14% year-on-year increase in new business premium for the reporting month, the industry as a whole suffered due to a 32.14% Y-o-Y decline in new business premium from Life Insurance Corporation of India, the largest player in the market. During March, the life insurance industry's premium decreased by 12.6%, even though private life insurance companies performed well. There was also a 12.2% decline in the number of policies sold.