Indian life insurers' new business premiums inch 7% in FY2020-21

Private insurers grew 8% in individual business, whilst group business saw a 20% growth.

The Indian life insurance industry reported a 7% growth in new business premiums to $37.4m (INR2.78b) in FY 2020 to 2021 against $34.8m (INR2.59b) in the previous year, according to HDFC Life’s annual report for 2020.

Private insurers grew 8% in individual business, whilst group business saw a 20% growth. The Life Insurance Corporation of India recorded a 3% de-growth in individual business whilst its group business inched up 1%. 

The development of alternate channels of distribution and product innovation have been the key drivers for the growth in market share of private insurers in the individual business, the insurer said, which has increased from 37% in FY 2011 to 2012 to 60% in FY 2020 to 2021.

The private sector’s top 10 insurers accounted for 88% of the market in terms of individual weighted retail premium in FY 2020 to 2021 versus 85% in FY 2016 to 2017. Distribution arrangements with large banks have been a key driver for most of the large insurers, HDFC Life said.

In addition, diversification within savings products—triggered by product innovation, changing customer preferences, and evolving regulations—has resulted in private life insurers shifting focus from a largely unit-linked dominated product mix to a more diversified one.

Over the last few years, private insurers have increased their focus on the under-penetrated protection segment, both within the individual and the group segments. Focus on the retirement space has also increased given the market opportunity, the report concluded.