The Life Insurance Corporation of India (LICI) remains the largest player in the Indian life insurance market despite having 23 private companies operating competitively in the segment. As of January 2019, the share of private players was 33.74% in the Indian life insurance market. However, each year, the consolidated share of private players is noting a prominent increase whereas the share of LICI is recording a decline.
Marking a definite improvement in FY 17, the life insurance density was at $55 while its penetration in India had gone up to 2.76%. According to various industry insiders, rising digitalisation and new product offerings are well-placed to push the growth of this segment in coming years.
Market share, profit and growth
The total market value of LICI stood at ₹28.74 lakh crore at the end of FY 19 which was up by 8.61% as compared to the previous FY. The ‘Annual Report 2017-18’ of the Insurance Regulatory and Development Authority (IRDAI) states, “On the basis of total premium income, the market shares of LICI decreased from 71.81% in 2016-17 to 69.36% in 2017-18. The market share of private insurers has increased from 28.19% in 2016-17 to 30.64% in 2017-18. The market share of private insurers in new business premium was 30.64% in 2017-18 as compared to 28.89% in previous year. The same for LICI was 69.36% in the 2017-18 fiscal as compared to 71.11% in previous year.”
According to latest data, during FY 18, the life insurance segment as a whole reported a profit after tax (PAT) of ₹8511.99 crore that was increased as against ₹7727.89 crore of PAT collected in FY 17. LICI reported a PAT of ₹2446.41 crore with an increase of 9.62% over its performance in the previous fiscal. Additionally, out of 24 life insurance companies, 19 companies reported profits in FY 18.
The public-private tussle
This story is from the November 1-15, 2019 edition of BUSINESS ECONOMICS.
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This story is from the November 1-15, 2019 edition of BUSINESS ECONOMICS.
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