India life insurance first-year premiums bounces back at 15.3% in October

Premiums, however, fell compared to the month before.

First-year premiums in October FY2022 reached $3.06t, a 15.3% year-on-year (YoY) growth compared to the same period last year, according to a report by ratings firm CareEdge.

Following a regular trend, premiums fell sequentially compared to September 2022. The YoY growth can primarily be attributed to group single premiums and more specifically to the Life Insurance Corporation (LIC) of India, whilst growth in individual premiums at the private players too supported growth. 

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The year-to-date FY2023 first-year premium numbers grew by 34.7% vs. the 4.1% growth reported in the same period last year. The year-to-date FY2023 growth can also be attributed to an increase in group single premiums, and a low base, which saw subdued levels due to the pandemic-induced (Covid-19 second wave) lockdowns.

The overall outlook is expected to be positive in the medium term according to CareEdge.

CareEdge said that insurance demand is positively correlated with economic growth and grows at a multiple to the gross domestic product. The top line of life insurers is anticipated to remain healthy for FY2023 as it would be the first full year without any COVID-19-related restrictions. 

“The growth would be driven by a supportive regulatory landscape, strong demand for annuity and protection plans along with increased persistency levels. Other factors include an intense push to increase insurance coverage, especially in the rural populace, product innovations/customisation, and distribution channels being coupled with digitalised infrastructure for easier user interaction,” CareEdge said.