Mumbai- Life insurers collectively witnessed a 0.9 per cent decline in the first quarter new business premium collections to Rs 73,004.9 crore, mainly due to a massive drop in group premium mop-up led by the market leader LIC, according to a report.
Life insurance companies had reported a massive 39.7 per cent growth to Rs 73,674.5 crore in the first quarter of the previous fiscal, it added.
During the April-June quarter, the national insurer saw its total collections contracting by 7 per cent to Rs 44,837.2 crore against a 35.4 per cent jump in the year-ago period at Rs 48,201 crore.
LIC’s individual single premium mop-up declined by 1.4 per cent to Rs 4,568.3 crore from Rs 4,633.2 crore in Q1 FY23, when it had grown by 38.1 per cent, Care Ratings said in the report.
Similarly, individual non-single premiums fell 6.6 per cent year-on-year to Rs 5,870.9 crore from Rs 6,283.4, when it had jumped by 35 per cent.
Group single premium also declined by 7.4 per cent to Rs 33,465.6 crore from Rs 36,143.9 crore, which was a 33.1 per cent growth year-on-year.
Group non-single premium fared the worst with a massive 20.5 per cent contraction to Rs 836.3 crore compared to Rs 1,051.4 crore in the previous year, a massive rise of 218 per cent.
However, the group yearly renewal income increased by 8 per cent to Rs 96.2 crore from Rs 89.1 crore a year ago, when it had contracted by 5.8 per cent.
The overall decline comes despite an 18.3 per cent jump in the first-year premium collection in June against a 4.1 per cent decline in May, led by the steady growth posted by private players and a recovery in LIC’s single premiums mop-up, according to the numbers collated by Care Ratings.
Among total collections in the first quarter, private players grew 10.6 per cent to Rs 28,167.7 crore year-on-year from Rs 25,473.5 crore, when it grew by 48.8 per cent.
Of the total, individual single premiums rose 9 per cent to Rs 3,919.2 crore from Rs 3,594.3 crore in Q1 FY23, when it had grown by 34.4 per cent and individual non-single premiums rose 7.9 per cent to Rs 11,202.6 crore from Rs 10,380.6 crore in the year-ago period, an increase of 47.14 per cent.
Group single premium rose 14.8 per cent to Rs 10,700.4 crore from Rs 9,321.7 crore in the 12 trailing months, when it had jumped by 56.8 per cent, but group non-single premium collections plunged 57.4 per cent to Rs 16.6 crore from Rs 39 crore.
On the renewal front, group yearly renewal income grew 8.9 per cent to Rs 2,328.9 from Rs 2,137.9 crore, when it had grown by 51.3 per cent.
LIC’s first-year premium increased 21 per cent in June compared to a drop of 5.3 per cent in June 2022 on the back of single premiums, while private insurers continued their growth momentum with a 13 per cent uptick in June compared to 29.2 per cent in June 2022.
The aggregate fall can be attributed to higher momentum in March 2023, reduced single premiums, primarily by LIC and as the new tax regime has been made more attractive and also the default tax regime for individual taxpayers, the agency said. (PTI)