Chennai: First-year life insurance premiums in December jumped 43 per cent after declining for six months since April.
Following robust growth in FY23, first-year premium numbers in FY24 have been moving in a subdued manner. However, for December 2023, first-year life insurance premiums witnessed a significant jump of 43.8 per cent
On the other hand, year-to-date FY24 new business premiums of life insurers narrowed their drop to 7 per cent compared to the fall of 12.7 per cent reported last month and the growth of 31.2 per cent growth in YTDFY23. The y-o-y decline can be attributed to a substantial reduction in group premiums, the introduction of a new tax regime, and the significant momentum experienced in March 2023. While private insurance companies have maintained growth and have continued to play a mitigating role by counteracting the dip in LIC premiums.
Most companies including LIC have grown for December 2023. LIC recorded a sudden spike of 93.8 per cent in December due to a large client group. The private insurers recorded growth of 4.2 per cent which was roughly a third of the 14.9 per cent witnessed in December 2022.
On the other hand, for the year-to-date period, private companies have continued their growth compared to LIC’s fall.
For December 2023, single premiums rose by a substantial 74.5 per cent against the year-ago month. The group premiums rose by 98.1 per cent, compared to an increase of 5.3 per cent in December 2022.
After this strong growth in FY23, the industry has witnessed a slowdown over YTDFY24. The fall in performance can be attributed to customers purchasing insurance policies in March 2023, right before the implementation of budgetary changes and deceleration in group business.
