The share of LIC in monthly new business premium (NBP) in the life insurance sector declined to 58.50 per cent in September 2023 from 68.25 per cent in September 2022 — a drop of 975 basis points — owing to shortcomings in the product and distribution side of business.
However, the market share saw a marginal uptick from the 57.37 per cent recorded in August this year.
According to the monthly business data released for September 2023 by the Life Insurance Council, the NBP of LIC up to September 2023 stood at Rs 92,462.62 crore as compared to about Rs 1.25 trillion in the same period a year ago.
As a result, the life insurance industry’s NBP declined almost 13 per cent during the first six months to about Rs 1.59 trillion.
Lower sales of participating products and lack of competitive non-participating products, along with the changes made to product features and pricing, have led to the decline in the market share of LIC, said insurance analysts.
Meanwhile, the share of private life insurers saw a steady increase to 41.50 per cent in September 2023 from 31.75 per cent in September 2022.
Among private life insurers, the market share of HDFC Life Insurance in NBP rose to 8.31 per cent from 6.07 per cent and that of SBI Life Insurance to 10.27 per cent from 7.19 per cent.
ICICI Prudential Life Insurance, Bajaj Allianz Life Insurance, and Max Life Insurance saw a near less than 1 per cent increase in their market share from September 2022.
Of the new policies generated in this period, 94.39 per cent of the policies were participating products and 5.61 per cent of policies were non-participating products.
Meanwhile, on the distribution side, higher dependence on agent-led networks for selling policies, instead of bancassurance and other alternative methods, is impeding growth in premium.
