Life Insurance Premiums Drop Again In December 2024 As Group Single Premiums Decline — CareEdge's Analysis

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CareEdge Research Report

The life insurance industry reported a 2.3% year-on-year decline in Annual Premium Equivalent in December 2024, following a 13.6% growth in December 2023. Private life insurers were partially able to offset the anticipated drop (due to premium normalisation) in LIC for the month. The reduction in group single premiums can explain the drop.

Factors influencing growth include changes in policy structures regarding the sum assured and commissions, following the revised surrender value guidelines effective October 1, 2024, challenges faced in the bancassurance channel, and heightened competition in several key channels.

LIC generates over 90% of its individual new business premiums through the agency channel, whereas private insurers source over 50% of their individual new business premiums from the bancassurance channel.

In December 2024, sales of Individual Non-Single policies reached Rs 20.1 lakh, reflecting a 21.0% drop compared to the previous year, largely due to changes in surrender value regulations. The industry's compound annual growth rate from December 2022 to December 2024 was 5.4%, with private players achieving 10.2%, while LIC experienced a decline of 5.6%.

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