Indian Life Insurance Industry Analysis – 2018-19

(Last Updated On: May 9, 2019)

Life insurance industry in India showed a growth of 10.73% in Total First-Year Premium collection compared to the previous year. In the meantime, 1.73% was the growth shown in Number of Policies (NOP) and 11.63% on Sum Assured underwritten in the corresponding period.

The premium growth percent registered this year was marginally lower compared to the previous year. Notably, the premium growth was 10.99% in 2018-19 against the current year growth of 10.73%.

Growth In Life Insurance Industry- 2018 Vs 2019
20182019Growth %
Premium (Crores)193866.24214672.8610.73%
Number of Policies28198778286878121.73%
Sum Assured(Crores)3882171.654333541.4111.63%

Life Insurance Industry in India – Overview

The life insurance industry in India is regulated by the Insurance Regulatory and Development Authority (IRDA). Twenty four Life Insurance companies are licensed to do Insurance Business in India. Out of these companies, Life Insurance Corporation Of India (LIC of India) is the only public sector company.

  • Steady Growth Rate: India’s life insurance industry has been growing at a steady pace. Over a period of 6 years from the financial year 2012 to 2018, the new business premium has grown at a CAGR (Compounded Annual Growth Rate) of 14.44%.
  • Low Insurance Penetration: Despite the steady growth rate, life insurance penetration ( Premiums as % of GDP) in India still remains low, at 2.76 % as of 2017.  Combined insurance penetration of life and non-life is 3.69 % as of 2017.
  • Increasing Private sector contribution: The market share of private insurance companies were 2.00% in 2003 but has grown to 33.76% in terms of premium on the financial year 2019.
  • Government Support:
    • (A) Tax incentives for insurance products with the exempt – exempt – exempt model of taxation.
    • (B) IRDA provides a robust and reliable regulatory platform for the insurance industry.
    • (C) IRDA recently allowed life insurance companies that have completed 10 years of operations to raise capital through Initial Public Offerings (IPOs). Companies will be able to raise capital if they have embedded value of twice the paid-up equity capital
  • LIC of India Continues to dominate the market: Since opening up of the market and constitution of IRDA in 1999, the number of private players has increased with time and has reached 24 as of 2019. But Still LIC of India the only public sector insurer is dominating the market with 66.24% of market share in premium.

Premium comparison 2018 vs 2019

Total premium includes single as well as non-single premium collected. Each of these premium groups comprises of individual and group premiums. The above info-gram will help you to understand the comparison easier.

Life Insurance Industry in India Premium Comparison 2018 19

Individual non-single premium registered a growth of 9.5% in 2019 compared to 2018. On the other hand, the group-non-single premium showed growth of 39.21%.

Private Insurers vs LIC of India

Detailed comparison of category wise premium break up of private companies vs LIC of India is shown here.

Private vs LIC of India - Premium break up

LIC of India is leading in three categories namely Individual Single Premium, Group Single Premium, and Group Non-Single premium. On the other hand, Private total is higher in Individual Non-Single premium and Group-Yearly-Renewable premium.

Market Share – Life Insurance Companies

Life insurance Industry - Market share of Insurance companies

LIC of India, the only public sector company leads the market with 66.24% share in premium and 74.71% in the number of policies. HDFC Life leads the market in terms of premium with 6.97% share and SBI Life leads with 5.32% in terms of the number of policies among the private insurers.

Market share of life insurance companies in India 2019 20

Click here to download the info-gram showing the market share of insurance companies in India.

Performance of LIC of India-2018 vs 2019

The total premium collected by LIC of India increased by 5.68 % in 2019 compared to the previous year. LIC of India collected a premium of 142191.69 crores in 2019 whereas the premium collection for the year 2018 was 13455.68 crores.

Comparison of Premium LIC of India 2018 19

Individual single premium reduced by -8.3 % in 2019 but the group non single premium increased by a whopping 66.32%. Individual non single premium increased by 5.87% in 2019.

Insurance Industry In India- 2019 Major Changes

New investments by the private sector in Insurance

  • Insurance companies in India raised around Rs. 434.3 billion through public issues in 2017.
  • In January 2019, online insurance distribution platform, Turtlemint raised US$ 25 million in funding.
  • Various investors like Madison India, Westbridge Capital, Motilal Oswal, etc. have invested around 1745 million US$ in Star Health and Allied Insurance Co Ltd.
  • Warburg Pincus has invested US$ 282 on ICICI Lombard General Insurance Company Ltd.

New distribution channels and innovations

  • New distribution channels like bancassurance, online distribution and NBFCs have widened the reach and reduced costs
  • Firms have tied up with local NGOs to target lucrative rural markets
  • In October 2018, Indian e-commerce major Flipkart entered the insurance space in partnership with Bajaj Allianz to offer mobile insurance.
  • India Post Payments Bank (IPPB) partnered with Bajaj Allianz to distribute its products in September 2018.
  • In September2018, HDFC Ergo launched ‘[email protected]’ cyber insurance policy for individuals.

LIC of India Acquires IDBI

LIC of India acquired 51% stake in IDBI Bank by investing 14500 crores. This deal which was the part of a bailout package for the sinking bank is expected to provide a win-win situation to both the partners.

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6 thoughts on “Indian Life Insurance Industry Analysis – 2018-19

  • June 15, 2019 at 6:19 pm
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    Hello Sir..
    i applaud for your efforts on writing best paper on life insurance which is very specific and purposeful to my Ph.D work..i require your guidance on life insurance .Hope i will get assistance and guidance from your side.
    Thanks a Lot dear Sir
    Varinder Kumar
    Assistant Prof of Commerce

    Reply
    • June 16, 2019 at 5:41 am
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      Hi Varinder Kumar,
      Happy to understand that the article was useful to you. Thank you.

      Reply
  • June 15, 2019 at 6:21 pm
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    Dear sir ..will you please send this article (soft copy) by mail at [email protected]

    i shall be very thankful to you

    Reply
    • June 16, 2019 at 5:42 am
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      I am sorry that the facility is not available. You can use the buttons provided in the post to email the post to your address

      Reply
  • August 10, 2019 at 2:32 am
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    According to you sir which is the best top 5insurance company to investors

    Reply

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