Life insurers reported that first year premium declined 30% to ₹12,565.31 crore in April, a month usually lean from a new business perspective coming as it does after a hectic March when many customers make a last-minute dash to benefit from the accompanying tax break.
Dragging overall performance of the insurers, who in the same period of the previous fiscal mobilised ₹17,939.62 crore, was a 50% decline in the premium of Life Insurance Corporation of India (LIC). First-year premium of the market leader totalled ₹5,810.10 crore (₹11,716.70 crore), according to the new business statement of life insurers for April 2023 released by the insurance regulator.
Private players — despite at least seven insurers reporting a decline — registered a more than 8% increase in the first year premium at ₹6,755.21 crore (₹6,222.92 crore). Their share of the market, for the month, was 53.76%.
The April performance is in continuation of the life insurers’ March show when the first-year premium was 12.63% lower at ₹52,081.12 crore despite a customer rush to make most before the April 1 withdrawal of tax exemptions for non-linked policies above ₹5 lakh. Private life insurers’ premium increased 35.14% while LIC reported a 32.14% decline then.
Emkay Research said the life insurance sector reported a muted show in April 2023, with retail APE (annual premium equivalent) declining 2.5% YoY, “which doesn’t come as a surprise as taxation changes related to high ticket non-linked led to bumper sales in March.”
For the fiscal, it is early to take a call on the full impact of the change as April is a seasonally less-relevant month for life insurance saving products. “If anything this small decline suggests insurers would be better equipped to navigate through the challenges thrown at them with taxation changes in the Union Budget for FY24,” the report said.