In September 2023, LIC's market share declines by 58.50% YoY, and premium and policy figures decline

 In September 2023, LIC's market share declines by 58.50% YoY, and premium and policy figures decline

According to data given by the Life Insurance Council, the insurance behemoth Life Insurance Corporation of India (LIC) has lost market share of almost 58.50 percent for the year ending in September 2023. According to reports, this is a 975 bps decrease from the 68.25 percent registered in September 2022.

There is a modest reason to rejoice, though, because the month-over-month (MoM) share increased in September 2023 compared to August 2023 by 57.37 percent.

The LIC is in a slump.

According to data from the Life Insurance Council, LIC's new business premiums for September 2023 were 18,126.32 crore, down from 24,991.26 crore recorded in September 2022. Additionally, new business premiums up till September 2023 are down 25.40% year over year (YoY) to 92642.62 crore from 124191.08 crore for the same period in 2018.

The national insurer saw an increase in the number of policies and schemes of 1,481,455 MoM in September 2023 as compared to 1,323,418 in September 2022. Up until September 2023, there will be 8,076,638 schemes and policies in effect, a 3.56 percent YoY decline from 8,374,748 the year before.

According to Business Standard, obstacles on the product and distribution sides can be blamed for the downturn. Insurance analysts have attributed the decline in LIC's market share to a combination of factors, including lower sales of participating products, a dearth of alternatives that are competitive, and changes to product features and price.

gloomy numbers across

New business premiums for the insurance industry as a whole were $30,716.52 crore in September 2023 in contrast to $36,366.52 crore in September 2022.

Year-to-date (YTD) new premiums decreased by 12,97%, totaling 158,376.81 crore as of September 2022 versus 181,976.95 crore.

In September 2023, all insurers had 2,211,698 policies and plans, up from 2,006,831 in September 2022. YTD figures decreased from 11,766,197 to 11,764,001, a 0.02 percent decrease.

According to the report, SBI Life experienced a 10.27 percent increase in new business premiums (compared to a 7.19 percent increase), HDFC Life experienced an 8.31 percent increase (compared to a 6.07 percent increase), Max Life, ICICI Prudential Life, and Bajaj Allianz Life each experienced a market share increase of less than 1 percent.

experts talk

Analysts predict that India's sizable young population, which relies more on digital services for choosing insurance policies, will be the main driver of the growth in life insurance premium. However, the analysis noted that the continued use of conventional techniques will effect the premium and that the increased commission structure for agents has a negative impact on LIC's profit margins.

Over 96% of LIC's first-year premium in FY23 came from agents and insurance consultants. In contrast, just 20% and 18% of the business for two of the largest private insurers, HDFC Life and SBI Life, came via agents, respectively.

Manogna Vangari, an insurance analyst at GlobalData, told BS that private insurers had an advantage over LIC due to their use of digital efforts to improve customer experience. This includes real-time claims tracking, virtual meetings to answer consumer questions, and simple onboarding of clients and agents using digital technologies.