Page 19 - Insurance Times December 2022

herring prospectus (DRHP), IRDAI had sector witnessed their combined new cent as of October, a gain of 447 basis
rejected the conversion of CCPS into business premium increasing by 11 per points (bps), while private sector
shares because it would result in Go cent to Rs 8,996.45 crore, as against insurance companies' market share
Digit Infoworks (the holding company Rs 8,105.46 crore in October 2021. dropped to 32.28 per cent.
of Digit Insurance) becoming a
On a cumulative basis, all the 24 At the end of 2021-22, private players
subsidiary of the Fairfax group, which
players registered 35 per cent increase had 36.75 per cent share of the life
is not allowed by regulations.
in new business premium income insurance market, while LIC had 63.25
In its filing, Fairfax said that the during April-October period of 2022-23 per cent. At the end of 2020-21, LIC's
majority ownership of Digit would at Rs 2,06,893.51 crore as against Rs market share was 66.18 per cent;
enable Fairfax to report a gain of 1,53,588.14 crore in the same period private players took up 33.82 per cent
approximately $375 million. of 2021-22, as per the data. of the market.
NBP is the premium acquired from
New business premiums LIC has edge over pvt new policies for a particular year. It is
of life insurers grow 15% insurers: Gains market the sum of first-year premium and
single premium, reflecting total
The new business premium income of
share in FY23
life insurance companies rose by 15.3 premiums received from the new
Life Insurance Corporation (LIC) of India business written.
per cent to Rs. 24,916.58 crore in
has gained almost 4.5 percentage
October 2022, data from the Life
points market share in the current
Insurance Council showed. Early exit benefit in term
financial year (2022-23, or FY23) in
All the 24 life insurers had a collective new business premium (NBP) from plans allows policyholders
new business premium income of Rs private players, mainly on account of
to withdraw early, pays
21,606.25 crore in the same month a robust growth in its group business
year ago (October 2021). segment. back premium
LIC recorded 18 per cent rise in its new According to the latest data released Term insurance policy buyers now have
business premium at Rs 15,920.13 by the insurance regulator - the the option to exit the policy early and
crore during the month, as against Rs Insurance Regulatory and even get the premium back. And this
13,500.78 crore a year ago. Development Authority of India - LIC convenience will come at no extra cost
The rest 23 players in the private improved its market share by 67.72 per or difference in premium amount.
Advertised as Zero-cost term plans,
some term policies offer this feature
LIC shares up nealty 6% after strong Q2 show through early exit benefit.

Life Insurance Corporation's (LIC's) shares jumped 5.85 per cent following Early exit is a benefit that is similar to
its July-September quarter (Q2FY23) earnings where it reported a multifold the terminal illness rider, premium
jump in net profit due to a change in its accounting policy, wherein it break, etc., available on a term
transferred Rs 14,271.80 crore to the shareholders' account from the non- insurance policy. It is different from a
participatory account. term plan with a return of premium
(TROP), in that it allows policyholders
Shares of the insurance behemoth rallied 8.7 per cent to Rs 682.7 intraday
to discontinue their term policy within
on the BSE, finally ending at Rs 664.80 apiece. Similarly, the shares jumped
a specified window and get the full
9.11 per cent to Rs 684.9 intraday on the NSE, and closed at Rs 664.2 apiece,
premium back, net of GST, paid till that
up 5.81 per cent recently.
point. Currently, three insurance
Net profit of the corporation in Q2 stood at Rs 15,952.49 crore, up 11 times
companies offer this benefit on their
from Rs 1,433.71 crore in the year-ago period. In the preceding quarter,
term insurance policies.
the insurer had reported a net profit of Rs 682.88 crore.
In TROP, the full premium (excluding
Having said that, its embedded value (EV) was flat at Rs 5.44 trillion as of
GST) is paid as survival benefit at the
July-September quarter, despite Rs 10,000 crore increase in value of new
end of the policy term if the
business in the past one year. In the year-ago period, the corporation
policyholder lives through the entire
reported an EV of Rs 5.4 trillion. term of the policy.
The Insurance Times December 2022 17