Is Life Insurance Getting Expensive? LIC Report Sheds Light

The Indian life insurance sector recorded a robust year-on-year (YoY) growth in new business premiums (NBPs) for October 2024, with premiums increasing by 13.16% compared to the same period last year, Life Insurance Council observed in its October 2024 business report. 
NBP collections surged from Rs 26,819.01 crore in October 2023 to Rs 30,347.6 crore in October 2024. 
The insurance sector witnessed a remarkable year-to-date (YTD) performance with collections rising 18.56%, from Rs 1,85,195.81 crore to Rs 2,19,561.64 crore, as per the Life Insurance Council. 
However, even with this positive financial performance, the number of new policies issued took a sharp downturn, declining 41.6%. 
The month of October 2024 saw only 12,01,214 policies issued, a steep drop from the 20,56,928 policies sold in the same period last month. 
The industry's focus on attracting new customers propelled the expansion in the sector. The sector achieved a 4.52% increase in combined individual premium collections for October and a significant 16.89% growth YTD.
Breaking down premium types, individual single premiums experienced an 8.6% YoY growth in October, totaling Rs 3,397.07 crore. Year-to-date, this segment saw an even stronger increase of 14.16%. Meanwhile, individual non-single premiums rose 2.76% in October to Rs 7,453.5 crore, with YTD collections marking an 18.23% YoY increase, as per the data. 
The group policy segment also contributed substantially to growth. Group single premiums soared by 15.81% to reach Rs 18,258.37 crore in October, helping this category achieve an 18.61% YoY growth in premiums. Policy issuances within the group segment bucked the downward trend of individual policy issuances, registering a modest increase of 2.7% YoY.
The life insurers added 5,82,565 individual agents over the past year, bringing cumulative agent count up by 2.64%, as per the data. 
Life Insurance Council noted that the sector is embracing digitization for improved customer reach and service delivery. The digital transformation is expected to amplify insurance penetration and drive sustained growth in premiums for FY25 and beyond, the council added.