India’s Life Insurance Industry Records Robust Growth in July 2024

The Indian life insurance sector witnessed a surge in July, with the total annualised premium equivalent (APE) experiencing a substantial 16.9% year-on-year increase. This growth was primarily fueled by the private sector, demonstrating a remarkable 18% rise in APE. Life Insurance Corporation of India (LIC), the country’s largest insurer, recorded a more moderate growth of approximately 13.5%.

APE represents the sum of annualised first-year premiums on regular premium policies and 10% of single premium policies sold during a fiscal year.

In terms of overall premium collections, the industry witnessed a 14% year-on-year increase in July. While LIC’s APE growth was relatively modest, its total premium collections surged by 20% during the same period. The industry amassed a total premium of ₹31,822 crore in July and ₹1.21 lakh crore from April to July, reflecting a 20.5% year-on-year growth.

Among the major life insurance companies, SBI Life Insurance reported a 9.3% increase in APE, primarily driven by robust sales of regular insurance policies. However, despite the surge in new policy sales, SBI Life’s total premium collection declined by 26% in July, partially due to a high base effect.

Max Life Insurance demonstrated strong performance, with a 38% jump in APE and a 27% rise in total premiums. In contrast, ICICI Prudential Life Insurance recorded a relatively subdued performance, with APE growing by just 3.6% and total premiums increasing by 7.3%.

HDFC Life Insurance stood out with a 49.5% growth in APE and a 33.7% increase in total premiums. However, this growth was partially attributed to a lower base compared to the previous year.

Unit-Linked Insurance Plans (ULIPs), which invest in the stock market, played a significant role in driving APE growth in July. The recent rally in equity markets made ULIPs more appealing, boosting their sales.

The robust growth in APE across the industry in July was partly influenced by a lower base compared to the previous year. In March 2023, there was a surge in high-value, non-participating policy purchases before new tax rules took effect, leading to a higher base for comparison.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.