Life insurance companies reported robust growth in new business during August, with industry-wide first-year premium rising 33.1% year-on-year to ₹41,197.8 crore, according to latest data from CareEdge Ratings. This performance represents one of the fastest new business premium growth rates for the financial year, improving from a 20.7% increase in July to ₹47,050 crore. The August growth was primarily driven by Life Insurance Corporation of India, which led the charge with exceptional performance across both public and private segments. Shares of life insurers rose up to 3% despite overall market weakness on Tuesday, with HDFC Life jumping nearly 3% to trade at ₹547.80 and LIC rising nearly 1%.
Life Insurance Corporation of India emerged as the standout performer, with its first-year premium rising 45.3% from a year earlier to ₹23,275.4 crore. According to CareEdge Ratings, LIC's new business premium (NBP) rose 45.3% to ₹23,275.4 crore during the month, significantly outpacing the industry average and reinforcing LIC's market leadership position. The state-owned insurer's strong performance was largely driven by group single-premium business, which rose more than 70% to ₹17,141 crore, while LIC's retail-weighted premium also grew 12.8% in August. LIC consequently accounted for 56.5% of August industry NBP, compared with 51.8% a year earlier, highlighting the company's continued dominance in the market. The sharp increase also highlights the widening gap between LIC and the private insurer segment during the month.
Private life insurers collectively reported first-year premium of ₹17,922.4 crore, up 20% year-on-year, demonstrating consistent growth across the sector. Among major private players, SBI Life posted the strongest growth at 2.83% increase to ₹3,415.38 crore, with retail-weighted premium increasing 21.8% during August. HDFC Life maintained double-digit expansion with 17.8% increase to ₹3,609.49 crore and retail-weighted premium up 17.4%. ICICI Prudential Life recorded a 9.94% increase to ₹1,952.81 crore, and Axis Max Life Insurance achieved 8.11% growth to ₹1,236.47 crore. On a year-to-date FY27 basis, private insurers continued to lead with NBP growth of 22.3%, while LIC declined 4.6%. Among private players, Bajaj Life and Aditya Birla Sun Life delivered notable growth, while HDFC Life maintained double-digit expansion.
The August surge was driven by group single-premium business, which jumped 56.1% year-on-year to ₹17,141 crore, while individual non-single premium rose 13.4% to ₹10,349 crore and individual single premium increased 34.7% to ₹5,512 crore. According to CareEdge Ratings, industry single premiums rose 51.6% year-on-year to ₹29,399.5 crore, while non-single premiums grew 2%. Group premiums grew 42.8%, mainly driven by a 56.1% rise in group single premiums, which accounted for around 84% of overall incremental NBP. According to Vineet Jain, Senior Director, CareEdge Ratings, "Retail-oriented premium growth remained more moderate at around 13.4%, while policy volumes remained subdued, indicating that NBP growth was driven more by ticket size than broad-based volume expansion." For the April-August period, total new business premium rose 20.4% to ₹1.97 lakh crore while retail-weighted premium increased about 13.9%.
The divergence in growth rates reflects the significant contribution of single premiums to overall performance. Private insurers' APE share rose to 63.5% from 62.2% a year earlier, with APE growing 19.5% versus 13.2% for LIC. Saurabh Bhalerao, Director, CareEdge Ratings, noted that "Group single-premium business emerged as the key growth driver, accounting for the bulk of the incremental NBP." Individual non-single policy volumes declined 6.2% year-on-year to 20.8 lakh in August, with private insurers' share rising to around 39% in YTD FY27 from 36%, while LIC's fell to 61% from 64%. CareEdge expects industry growth of 8-11% over the medium term, supported by wider distribution, product innovation and demand for protection, savings and annuity products. The brokerage noted that "Potential changes in bancassurance and insurance distribution regulations, alongside evolving market conditions, remain key to monitor."
