New business premium (NBP) of Life Insurance Corporation (LIC) of India dropped 50.41% year on year in April 2023, to Rs 5810.1 crore due to a sharp drop in group single premium.
Overall the new business premium of the life insurance industry dropped 30% in April over the same period last year though private sector companies showed a growth of 8.5 per cent.
LIC’s group single premium declined 65.76% to Rs 2899.63 crore in April while individual single premium dropped by 23.07% to 1014.47 crore.
Insurance business typically stays subdued during the first few months of a fiscal year but this year's sharp drop in premium is likely due to the government's decision to impose tax on high value insurance products from the current financial year.
The Union Budget for 2023-24 proposed to tax insurance premium of over Rs 5 lakh per year from 2023-24.
Group single premiums of private sector insurance companies however saw a growth of 15%. The group non-single premium segment of private life insurance companies declined by 50.47%.
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Among listed life insurance companies, SBI Life reported 8% increase in new business premium though its group single premium dropped 11.4% and group non-single premium dropped 59.12%.
NBP is the premium acquired from new policies in a year. It is the sum of the first-year premium and single premium, reflecting total premium received from the new businesses.
Another listed insurers, ICICI Prudential Life Insurance Company reported a 17% decline in new business premium in April mainly due to 47.46% drop in individual single premium.
HDFC Life reported 3.24% increase in new business premium for April.