Page 13 - Insurance Times November 2023

premium mobilisation by Life consequently leading to a subdued products, along with the changes made
Insurance Corporation (LIC) and the performance in the first half of FY24. to product features and pricing, have led
changes in the tax structure in high Consequently, in the first half, the new to the decline in the market share of LIC,
value policies. business premium for life insurers has said insurance analysts.
witnessed a contraction. This downturn
Total premium collection (new Meanwhile, the share of private life
business) declined to Rs 158,376 crore can be attributed to the deceleration insurers saw a steady increase to 41.50
during the six months as against Rs in group business, according to a Care per cent in September 2023 from
181,976 crore in the same period a Ratings report. 31.75 per cent in September 2022.
year ago. LIC's premium collection fell Among private life insurers, the market
to Rs 92,642 crore during the period LIC's market share drops to share of HDFC Life Insurance in NBP
from Rs 124,191 crore. LIC's group 59% from 68.7% in a year rose to 8.31 per cent from 6.07 per
single premium for the six months The share of LIC in monthly new business cent and that of SBI Life Insurance to
witnessed the maximum decline at Rs premium (NBP) in the life insurance 10.27 per cent from 7.19 per cent.
64,522 crore as against Rs 96,878 sector declined to 58.50 per cent in
crore a year ago. ICICI Prudential Life Insurance, Bajaj
September 2023 from 68.25 per cent in
The poor performance of the industry September 2022 -- a drop of 975 basis Allianz Life Insurance, and Max Life
is also evident from the number of points -- owing to shortcomings in the Insurance saw a near less than 1 per
policies which remained flat at 11.764 product and distribution side of business. cent increase in their market share
million during the six months ended However, the market share saw a from September 2022.
September 2023 as against 11.766 marginal uptick from the 57.37 per cent Of the new policies generated in this
million policies a year ago. "At this recorded in August this year. period, 94.39 per cent of the policies
rate, the life industry won't be able to were participating products and 5.61
achieve the last year's new business According to the monthly business data per cent of policies were non-
premium of Rs 3.70 lakh crore. The released for September 2023 by the Life participating products.
poor show is despite the regulator Insurance Council, the NBP of LIC up to Meanwhile, on the distribution side,
launching several initiatives to increase September 2023 stood at Rs 92,462.62 higher dependence on agent-led
insurance penetration," said an crore as compared to about Rs 1.25 networks for selling policies, instead of
trillion in the same period a year ago.
insurance official. bancassurance and other alternative
As a result, the life insurance industry's
A pivotal development impacting the methods, is impeding growth in
NBP declined almost 13 per cent during
industry has been the imposition of the premium.
new tax regime. This regulatory the first six months to about Rs 1.59
trillion.
change, effective from April 01, 2023, Insurers may get financial
has had visible implications on the Lower sales of participating products and creditor status from govt
sector's activities during this period, lack of competitive non-participating
To make the surety bond business
more attractive, the government is
Govt clears welfare measures for LIC employees, looking at making relevant changes in

agents the Insolvency and Bankruptcy Code
(IBC) to consider insurers as financial
Over 1 lakh employees and nearly 13 lakh agents of the Life Insurance
creditors in case of default of infra
Corporation of India (LIC) will have something to cheer, as the Finance
projects.
Ministry approved welfare measures, including enhancing the family pension
and gratuity limit. "The surety bond issued by a general
insurance company is a three-party
According to a statement by the Finance Ministry, the gratuity limit for
contract by which one party (the
agents has been raised to Rs. 5 lakh from Rs. 3 lakhs. "It will bring substantial
surety) guarantees the performance or
improvements to the working condition and benefits of LIC agents," the obligations of a second party (the
statement said. It also approved a proposal to enable reappointed agents principal) to a third party (the obligee).
to be eligible for renewal commissions, providing them with increased
The surety is a company that provides
financial stability. Currently, LIC agents do not qualify for renewal commission
the financial guarantee to the obligee
on any business completed under the old agency, the Ministry said..
(usually a government entity) that the
The Insurance Times November 2023 13