Life insurers' new business premium up 33% in August

Mumbai: Life insurers posted strong monthly growth in new business premium in August, but the underlying retail business expanded at less-than-half the pace of total income, as industry depended on single-premium and group business for growth.

Total new business premium rose 33% year-on-year to ₹41,198 crore in August, showed data released by Life insurance Council. At the same time, retail-weighted premium calculated by giving full weight to individual non-single premium and 10% weight to individual single premium, grew about 14%.

In April-August period, total new business premium rose 20.4% to ₹1.97 lakh crore, while retail-weighted premium increased about 13.9%.


The August surge was driven by group single-premium business, which jumped 56.1% year-on-year to ₹23,887 crore. Individual non-single premium, which shows growth in regular retail business, rose 13.4% to ₹10,349 crore, while individual single premium increased 34.7% to ₹5,512 crore.

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Industry has been seeing growth coming from protection and annuity business. However, some expect growth to slow down in the second half of the financial year.

"September is when the test will begin," said Sumit Madan, MD and CEO Axis Max Life, in a recent interview. "I am optimistic that we will continue to grow post-September. I would say growth will normalise. However, given the momentum, growth may be better than our expectations."

LIC, which is the largest insurer, reported a 45.3% jump in total new business premium in August to ₹23,275 crore. The increase was largely driven by group single-premium business, which rose more than 70% to ₹17,141 crore. LIC's retail-weighted premium rose 12.8% in August. For April-August, its total new business premium increased 19%, while retail-weighted premium grew 15.3%.

Among the large listed private insurers, SBI Life reported growth in August with its total new business premium rising 2.83% year-on-year, while retail-weighted premium increasing 21.8%. For April-August, SBI Life's total new business premium grew 12.73%, with retail-weighted premium up 16%.

HDFC Life also recorded a strong August, with total new business premium rising 17.8% and retail-weighted premium increasing 17.4%. However, its April-August income was lower with total premium up 14% and retail-weighted premium also around 6%.