The life insurance industry witnessed a reported first-year premium of Rs. 23,477.80 crore in May 2023, down by 4.10 per cent compared to the same period last year.
According to a statement released by the Insurance and Regulatory Development Authority (IRDAI) on June 9, 2023, the corresponding figure stood at Rs. 24,480.36 crore last year.
Market leader, the Life Insurance Corporation (LIC) of India, experienced a decline in its first-year premium for May 2023.
LIC's premium during this period was Rs. 14,056.29 crore, down by 11.26 per cent year-on-year (y-o-y) from the previous year's premium of Rs. 15,840.63 crore.
This decline could be attributed to various factors, such as increased competition, changing customer preferences, and the overall economic environment.
On the other hand, private insurers collectively showed growth in their first-year premium during May 2023.
Their total premium came to Rs. 9,421.51 crore, up 9.05 per cent compared to the previous year's premium of Rs. 8,639.72 crore.
This growth indicates that private insurers have been able to capitalise on market opportunities and attract customers with their innovative products, competitive offerings, and effective distribution strategies.
The statement by IRDAI also provides insights into the overall performance of the industry. It indicates a shifting landscape within the life insurance sector, with private players gaining traction and challenging the market leader's dominance.
Comparing the performance of May to the previous month, April, reveals an improvement in the first-year premium of life insurers.
In April 2023, the industry faced significant challenges, resulting in a 30 per cent y-o-y decline in first-year premium, which amounted to Rs. 12,565.31 crore.
LIC, however, reported a sharp decline of 50 per cent in new business, with a premium of Rs. 5,810.10 crore compared to Rs 11,716.70 crore in the previous year.
The overall decrease in premium, however, reflects the ongoing challenges and fluctuations in the insurance market.
The recovery and positive shift witnessed in May indicate a potential stabilisation and recovery phase for life insurance companies.
Factors such as changing regulations, economic conditions, customer demands, and competitive pressures contribute to the shifting landscape.
