LIC's market share slumps 58.50% YoY in September 2023, premium and policy figures fall

Insurance behemoth, the Life Insurance Corporation of India (LIC), has lost market share of around 58.50 percent for the year till September 2023, data released by the Life Insurance Council showed. This is down 975 bps from the 68.25 percent registered in September 2022, as per reports.

However, there is a small reason to smile, as month-on-month (MoM) share rose 57.37 percent in September 2023, compared to August 2023.

Follow our Markets LIVE here

LIC slump apparent

Life Insurance Council data showed that LIC's new business premiums for Septermber 2023 stood at ₹18,126.32 crore compared to ₹24,991.26 crore registered in September 2022. Further, new business premiums till September 2023 are also down 25.40 percent year-on-year (YoY) to ₹92642.62 crore, compared to ₹124191.08 crore for the same period last year.

Also Read: Israel-Palestine conflict: Does your life insurance policy cover wars? Here's what you should know

In terms of the number of policies and scehemes, the national insurer saw an increase of 1,481,455 MoM in September 2023 compared to 1,323,418 in September 2022. The total number of schemes and policies till September 2023 stands at 8,076,638 a 3.56 percent YoY decrease from 8,374,748 in the previous year.

The slump can be chalked down to product and distribution side hurdles, Business Standard reported. Insurance analysts have attributed the decrease in LIC's market share to reduced sales of included products, a lack of competitive options outside the participating ones, and alterations in product features and pricing, it added.

Numbers glum across

For the insurance sector as a whole, new buiness premiums in Septermber 2023 stood at ₹30,716.52 crore compared to ₹36,366.52 crore in September 2022.

Year-to-date (YTD) new premiums saw a 12,97 percent decline, amounting to ₹158,376.81 crore, compared to ₹181,976.95 crore in September 2022.

Also Read: LIC's strategy shift helps reducing government borrowing costs: Report

Policies and schemes by all insurers in September 2023 reached 2,211,698 compared to 2,006,831 in September 2022. YTD numbers fell by 0.02 percent to 11,764,001 compared to 11,766,197 a year ago.

Among the private life insurers, SBI Life saw an 10.27 percent rise in new business premiums (against 7.19 percent); while HDFC Life saw an 8.31 percent rise (against 6.07 percent); and Max Life, ICICI Prudential Life and Bajaj Allianz Life saw market share increase of below 1 percent each, the report added.

Analysts speak

Analysts anticipate that the growth in life insurance premium will be primarily propelled by India's substantial young population, who rely more on digital services for selecting insurance policies. However, the persistence of traditional methods will impact the premium, and LIC's profit margins are further affected by the higher commission structure for agents, the report noted.

Find more LIC related stories here

In FY23, over 96 percent of LIC's first-year premium came from agents and insurance advisors. In contrast, major private insurers, HDFC Life and SBI Life, garnered only 20 percent and 18 percent of their business, respectively, through agents.

Manogna Vangari, an insurance analyst at GlobalData, told BS, "Digital initiatives by private insurers, enhancing customer service, give them an advantage over LIC. This includes the ease of onboarding customers and agents through digital solutions, real-time claims tracking, and virtual meetings to address customer queries."