Life insurance companies posted a 26 percent rise in new premium collections for financial year 2017 (FY17) compared to previous fiscal, marked by strong growth in first-year premium due to demonetisation. The country’s largest insurer Life Insurance Corporation of India (LIC) beat the industry in premium growth, clocking 27 percent growth.
According to data from the Life Insurance Council, life insurers collected Rs 1.75 lakh crore as new premium in FY17. Of this, LIC contributed Rs 1.24 lakh crore. Their individual single premium segment saw a whopping 84 percent growth. Industry experts point out that the additional disposable income that was lying in bank accounts since Rs 500 and Rs 1000 were banned were used to buy insurance products.
Among private life insurers, SBI Life collected Rs 10,145.76 crore as first year premium, showing a 43 percent growth over FY16. HDFC Life collected Rs 8696.21 crore with 34 percent growth and ICICI Prudential Life Insurance collected Rs 7863.40 crore with 16 percent growth, as per the Council data.
The number of new policies sold by the insurance companies, however, showed a flat growth. Overall, the industry saw a 1 percent drop in number of policies, while LIC saw a 2 percent drop in this figure compared to FY16. Several private insurers saw a 5-30 percent drop in the number of new policies being sold.
Data infographics by Ritesh Presswala
This means that while the same number of policies are being sold every year, the average ticket sizes per policy are going up, resulting in an overall increase in premium collections. Bank-led insurance companies in the private sector showed a higher proportion of growth, both in premiums and the number of policies.
The last quarter of the financial year (Q4) continued to contribute almost 40-50 percent of the total premium collection for the industry. In fact, the month of March 2017 itself contributed almost a third of the first premium collections.