Page 17 - The Insurance Times August 2024

bonds have also dropped. For example, insurance companies have relinquished in the April-June period (Q1) of the
the 27-year bond maturing in 2051 is their positions due to adverse effects current financial year (FY25), aided by
trading at a yield of 7.06% - only of recent regulatory changes. strong growth by public and private
marginally higher than 10-year bond Data released by the Insurance sector insurers.
yield of 7%. These long-term bonds Regulatory and Development According to data released by the Life
were already highly sought-after, with Authority of India (IRDAI) reveals that Insurance Council, the new business
demand from insurance companies LIC's market share in Q1FY25 stood at premium (NBP) increased to Rs
surpassing supply. 64.02 per cent, up from 59.59 per 89,726.7 crore in the first quarter of

However, the entrance of new foreign cent in Q4FY24 and 61.42 per cent in FY25 from Rs 73,004.87 crore in the
investors in the bond market following Q1FY24. LIC's market share had peaked same period of last year.
JP Morgan index's inclusion of govt to 68.25 per cent in Q3FY23, which Driven by a strong demand for
bonds has further pushed down yields. gradually declined over subsequent enhanced insurance protection from
And if RBI cuts rates later this year to quarters, with private sector insurers individual consumers, new policy
keep pace with the US Fed, as gaining significant market share, insurance increased by 12.13 per cent
expected by some economists, bond majorly driven by SBI Life Insurance on a Y-o-Y basis in the month of June,
and HDFC Life.
yields could fall further. resulting in the addition of new 21.79
lakh polices as against 19.43 lakh
LIC regains market in new Life insurers post 22.91% policies in the year ago period.
business premium growth in Q1 new biz
LIC has significantly regained its premium SBI Life Insurance Q1 profit
market share in new business premium Life insurance companies reported a grows 36%
(NBP), driven by a substantial increase 22.91 per cent rise in first-year SBI Life Insurance reported a 36.48%
in group premiums, while private premium on a year-on-year (Y-o-Y) basis
year-on-year growth in net profit to
Rs. 520 crore for the June 2024
Mega LIC property sale to raise $6-7 billion quarter. The company's profit after tax
Some of India's priciest real estate across top metros may go on the block (PAT) stood at Rs. 381 crore in the
soon, with the Life Insurance Corp. of India (LIC) planning to raise $6-7 billion April-June quarter of financial year
from the sale of its plots and commercial buildings. 2023-24.
LIC, India's third-largest landlord, has tasked an internal team to work out SBI Life Insurance said it registered a
a sale plan for its real estate assets across the country, two people aware new business premium of Rs. 7,033
of the matter said, adding the process may start with Mumbai. crore during the period under review
compared to Rs. 6,207 crore in the
"We are working on the plan. There are multiple options we are internally
discussing. The valuation exercise will be key. What is the best route to June 2023 quarter.
monetize the real estate assets is yet to be formalized," said one of the Its regular premium has increased by
two people cited above, both of whom spoke on the condition of anonymity. 19% over the corresponding period
Some of LIC's premium real estate assets include the Jeevan Bharti building ended on 30 June 2023.
in Delhi's Connaught Place; LIC building in Chittaranjan Avenue in Kolkata; "Establishing a clear focus on
and buildings housing the Asiatic Society and Akbarally's in Mumbai. At the protection, SBI Life's protection new
time of their last valuation, LIC's real estate assets were pegged at a business premium stood at Rs. 720
conservative Rs. 50,000-60,000 crore, the two people said. LIC, India's crore for the period ended 30 June
biggest insurer and the largest investor in its stock market, owns assets 2024. Protection Individual new
worth over Rs. 51 trillion. business premium stands at Rs. 150
"For the formal asset sale process, a fresh valuation work for the LIC owned crore for the period ended 30 June
buildings may be carried out," said the second person. Many LIC buildings 2024," the insurer said in a filing.
have never seen any sale transaction and their market value is not known, Individual new business premium stood
the person said, adding the actual value may be "at least five times more at Rs. 4,749 crore with 17% growth
than the conservative one," which works out to be around Rs. 2.5-3 trillion. over the year-ago period.

16 August 2024 The Insurance Times