LIC's NBP jumps 30 pc to Rs 24,032 crore

Life companies reported a 30 per cent year-on-year YoY growth in new business premiums NBP in November due to a stellar show by State-owned Corporation LIC, even as their premium growth was lessened.

The NBP of the life insurance industry was up 30 per cent in November, up 30 per cent YoY, according to the data released by the Regulatory and Development Authority of India.

LIC's NBP went up 51 per cent YoY to Rs 24,032 crore during the same period despite private sector insurers reporting marginal growth of 2 per cent YoY to Rs 11,426 crore.

The growth of the LIC in NBP was mostly driven by group single premiums, which were up almost 70 per cent YoY in November.

The single premium market is the largest player in the group.

NBP is a premium that is acquired by new policies for a particular year. The total premiums received from the new business written are the sum of the first-year premium and single premium.

Private sector life grew 21 per cent on an annualized premium equivalent APE basis, following a 3 -- 11 per cent growth over the past three months.

In November, the LIC's premium on an APE basis went up 30 per cent YoY, as opposed to 11 -- 15 per cent in the past three months. There is a reason for higher growth in November after a slowed down in October due to the festival season.

APE is the sum of the total value of regular or recurring premiums plus 10 per cent of any new single premium written for the financial year.

Among listed private players, HDFC Life reported a 41 per cent increase in NBP in November, aided by a robust rise in group single premiums, individual single premiums, and individual non-single premiums.

Max Life posted a decent 11 per cent YoY growth in NBP during this period, thanks to individual single premiums.

ICICI Prudential Life Insurance, on the other hand, reported a flat growth of 1 per cent in NBP, as its non-single premium declined 28 per cent.

SBI Life posted a 32 per cent drop in the NBP in November, as its group single premium segment declined 75 per cent during this period.

On an individual APE basis, HDFC Life reported 45 per cent growth and SBI Life 30 per cent growth overall APE increased by 11.5 per cent as group APE was down 73 per cent, according to a Kotak Institutional Equities KIE report.

Bajaj Allianz reported a 26 per cent growth, almost the same as in the past two months.

Tata AIA Life was the strongest at 57 per cent growth YoY.

Life insurers reported a 34 per cent increase in NBP to Rs 2.42 trillion in FY 23 as a result of 43.26 per cent growth and 18.17 per cent growth.

"We remain positive on medium-term growth prospects, even though we do not rule out some weakness due to rising deposit rates in the near term," said KIE in its report.

A slightly difficult external macroeconomic environment means that the rest of FY 23 remains crucial to growth, according to analysts at Emkay Research.

With a host of reforms by the regulator and government on the anvil, growth volatility in the sector and individual company-specific non-operating issues, they observed that stocks would remain volatile in the near term.