Indian Life Insurers Report 22% Y-o-Y Growth in New Business Premiums; Policy Issuances See Modest Drop in August 2024

Indian life insurers recorded a new business premiums (NBPs) growth of 21.86 per cent year-on-year to Rs 32,644.09 crore in August 2024. In the year-to-date period, the NBPs have grown 20.78 per cent over the same period last year, according to the latest data from the Life Insurance Council.

According to the data, despite this impressive growth in premiums, new policy issuances fell slightly to 23,94,007, down from 24,28,895 policies sold in August 2023.

Key Drivers of Growth

The growth in new business premiums was largely supported by individual and group single premium policies. Individual single premiums grew by 8.35% Y-o-Y to ₹4,302.58 crore in August 2024, while YTD growth for this segment reached 15.54%. Meanwhile, individual non-single premiums also witnessed a notable 10.38% increase, amounting to ₹9,160.08 crore in August 2024, with a YTD growth rate of 17.25%.

Combined individual premium collections, which reflect the sum of single and non-single premiums, grew by 9.73% in August 2024 and 16.69% YTD, reflecting a growing focus on first-time life insurance buyers and heightened consumer awareness about the importance of life insurance protection.

In the group policy segment, single premiums surged by an impressive 37% to ₹17,894.61 crore, though non-single premiums dropped significantly by 85.43%, tempering overall YTD premium growth in this category. Group policy issuances, however, increased by 4.87% Y-o-Y, indicating sustained demand for group insurance solutions.

Decline in Policy Issuances Reflects Consolidation

While premium growth remained strong, the slight decline in new policy issuances by 1.44% highlights a consolidation phase in the life insurance market. This trend could indicate a shift towards products offering higher levels of insurance protection, resulting in fewer but larger policy issuances.

Expanding Insurance Penetration

The life insurance industry has also been actively expanding its agent network to enhance penetration, especially in underserved areas. In August 2024 alone, 1,08,147 individual life insurance agents were added, representing a 3.74% increase in the cumulative agent count since the start of FY 2024-25. The growing number of agents, combined with the rapid digitization of insurance services, is expected to further boost insurance penetration across the country.

Outlook for FY25

With the sustained pace of new business premium growth and increasing digital adoption, the life insurance sector is poised for further expansion. The industry’s efforts to broaden its reach, coupled with a rising focus on offering enhanced insurance protection, are likely to drive continued growth in FY25 and beyond.

The life insurance industry’s strong performance in August 2024 reflects a growing awareness of the importance of life insurance and a demand for comprehensive protection, even as the market consolidates around more premium-focused products.