Life insurance companies reported a 17 per cent year-on-year (YoY) drop in new business premium (NBP) in February as state-owned Life Insurance Corporation (LIC) of India’s premiums contracted 32 per cent during this period on account of a drop in its group single premium segment.
According to data released by the Life Insurance Council, the industry earned an NBP of Rs. 22,847.65 crore in February a drop of 17 per cent from the same period a year ago.
Generally, the last quarter of a financial year is the busiest period for life insurance companies as taxpayers look to buy savings and term products to reduce tax liability.
In January, the industry reported a 20 per cent jump in premiums, aided by private sector companies’ performance (23 per cent YoY growth), while LIC saw its premium go up 18 per cent YoY. In February, while private sector companies managed to record a 10 per cent jump in premiums to Rs. 10,968 crore, insurance behemoth LIC’s premiums dropped 32 per cent to Rs. 11,879.49 crore.
In the same period a year ago, LIC had earned premiums of Rs. 17,489 crore.
NBP is the premium acquired from new policies in a year. It is the sum of the first-year premium and single premium, reflecting the total premium received from new businesses. For LIC, the group single premium was a dampener, dipping over 40 per cent in February, dragging down its NBP.
