Dun & Bradstreet India’s Leading BFSI Companies 2017

Indian Life Insurance Industry

Despite the decline in its share, LIC dominates the Indian life insurance industry In FY16, the total premium income of the Indian life insurance industry stood at ` 3,669.4 bn, registering a growth of 11.8% over the previous year. Premium income of the private sector life insurers slowed down during FY16. The total premium income of the private sector insurers stood at ` 1,005.0 bn in FY16, registering a growth of 13.6% as compared to the growth of 14.3% recorded during FY15. The total premium income of the sole public sector life insurer, LIC, stood at ` 2,664.4 bn in FY16 registering a growth of ` 11.2% as compared to the previous year. Of the total premium income received by the life insurers in FY16, renewal premium accounted for 62.2% as compared to 65.5% in FY15. First year premiums contributed remaining 37.8% to the total premiums received in FY16, as compared to 34.5% in FY15. During FY16, the income through renewal premiums grew by 6.2% as compared to 10.7% growth in the previous year. During the same period, the income from first year premiums grew by 22.5% as compared to the decline of 5.8% in FY15. The bifurcation of first year premium income of life insurers indicate that the single premium income grew by 32.5% in FY16 as compared to the decline of 2.4% in FY14. In case of LIC, single premiumproducts continue to play an important role as they contributed 27.8% to the total premium income of LIC in FY16. In comparison to LIC, the share of single premium income in the total premium income of private sector insurance companies stood at 13.7% in FY16. The unit-linked products (ULIPs) registered a growth of 12.6% in FY16, growing from ` 416.2 bn in FY15 to ` 468.7 bn in FY16. On the other hand, the premium income from traditional life insurance products grew by 11.7% in FY16, growing from ` 2,864.8 bn in FY15 to ` 3200.7 bn in FY16. As a result, the share of ULIP products in total premium increased to 12.8% in FY16 as compared to 12.7% in FY15.

Share of Unit Linked Insurance Plans in the total premium income

0 100 200 300 400 500 600 700 800

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

FY12

FY13

FY14

FY15

FY16

Linked premium income

% share of in total premium income

Source: IRDA Annual Report 2015-16

The market share of LIC, on the basis of the total premium income, decreased from 73% in FY15 to 72.6% in FY16. On the other hand, the market share of private life insurers increased from 26.9% in FY15 to 27.4% in FY16. The comparison of the first year premiums of the life insurance companies in FY16 indicate that LIC continued to dominate the space with a share of 70.5%, while the share of private sector insurance companies stood at 29.5%. Similarly, in the income from renewal premium too LIC dominated the space with a share of 73.9% as compared to 26.1% share of the private insurers in FY16.

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