BENGALURU: Indiaâ€™s life insurance industry hit a record high by collecting Rs 4.58 lakh crore in premium for 2017-18 – a 10% increase over the previous financial year. Life insurance density — calculated by dividing the total insurance premium by the population — increased to $55 in 2017-18 from $46.50 in 2016-17, said IRDAI in its annual report. Life insurance penetration (premium as a % of GDP) in India has increased to 2.76% in 2017-18 from 2.46% the previous year.
The life growth has been fueled by the 23 private sector which saw growth accelerate to 19.15% from 17.40% in 2016-17. Governement-owned Life Insurance Corporation however saw growth dip to 5.90% from 12.78%.
This resulted in LIC’s marketshare come down to 69.36% from 71.81%, while private players increased their share of the pie to 30.64% from 28.19%.
LIC’s total premium for the year was Rs 3.18 lakh crore versus Rs 1.40 lakh crore for private companies. LIC however, grew its marketshare in terms of number of policies sold — implying that LIC sold more affordable products than private companies. Of the 281.97 lakh new individual policies sold in FY18, 213.38 lakh policies (75.7% ) were issued by LIC and 68.59 lakh (24.3%) by private insurers.
LIC showed better performance in persistency and in single-premium policies sales. LIC’s income from renewal premium for 2017-17 was Rs 1.83 lakh crore.
When it came to new business premium, LIC collected Rs 1.83 lakh crore, compared to private players booking Rs 81,104 crore — largely on the back of selling a large number of single premium policies. “Further bifurcation of new business premium indicates — single premium products continue to play a major role for LIC as they contributed 33.48% of LICâ€™s total premium income (vs 32.71% the previous year). In comparison, the contribution of single premium income in total premium income during 2017-18 was 15.58% for private insurance companies. When it came to first year premiums — a measure of the number of regular policies sold, excluding single-premium policies — LIC fared poorly (Rs 28,146 crore) compared to the private sector (Rs 37,581 crore).
Another shift in 2017-18 — possibly boosted by Sensex and Nifty touching highs — was the increase in sale of ULIPs. Share of unit-linked products in total premium increased to 14.13% in 2017-18 as against 12.63% in 2016-17. ULIPs registered a 23% growth to Rs 64,851 crore from Rs 52,845 crore, while traditional products grew at a slower pace of 7.75% to Rs 3.93 lakh crore from Rs 3.65 lakh crore.