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Overview

Following robust growth in FY23, first-year premium numbers in September 2023 witnessed a decline of 15.5%, an improvement from the 18.5% decrease observed in August. This trend was preceded by a more substantial drop of 28.7% in July and compares unfavourably to a 17.3% increase in September 2022. Several factors contributed to this decline, including a substantial reduction in group premiums, particularly attributable to LIC, introduction of a new tax regime, and the significant momentum experienced in March 2023. The private insurance sector, however, played a mitigating role by partially counteracting the dip in LIC premiums. While private insurance companies have maintained growth, their pace was comparatively subdued in comparison to the previous year.

Additionally, H1FY24 new business premiums of life insurers reported a drop of 13% compared to the 37.9% growth in H1FY23. The y-o-y decline can be attributed to group premiums (primarily single premiums and LIC). Private insurance companies continued their growth momentum as they witnessed growth in the individual space.

Figure 1: Movement in Monthly First-year Premium (Rs crore)

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