Private insurers growing much faster than LIC in life insurance segment: Nuvama - World News Network

New Delhi [India], September 10 (ANI): The private life insurance sector is giving a tough fight to state insurer Life Insurance Corporation of India (LIC), according to a report by Nuvama Wealth Management.
Although the private life insurance sector experienced a growth moderation in August 2024, with individual annualised premium equivalent (APE) rising by 14.7 per cent year-on-year (YoY), compared to its earlier robust pace.
Despite this in the current fiscal year to date (FY25TD), private insurers still managed a healthy growth rate of 22.8 per cent. In contrast, the public sector behemoth, Life Insurance Corporation of India (LIC), continued to underperform, with its individual APE growing by only 1 per cent YoY in August.
“Private life insurers’ individual APE grew 14.7 per cent YoY in August (FY25TD at 22.8 per cent) while that of LIC’s just 1 per cent YoY” said the report.
The private insurers are steadily capturing a larger share of the individual APE market. As per the report as of FY25TD, their market share stands at 68.3 per cent, reflecting a year-on-year gain of 314 basis points (bps).
As per the report, the public sector undertaking LIC continues to face challenges in keeping pace with its private counterparts. While its individual APE growth was a modest 1 per cent YoY in August, its total APE saw a marginal increase of 2.2 per cent YoY, driven by a 4.4 per cent rise in group APE.
However, when looking at LIC’s individual APE over the last five years, its CAGR stands at just 4.4 per cent, significantly lower than that of the private players.
“LIC continues to underperform private peers with individual APE growth of just 1 per cent YoY in Aug-24” said the report.
The private sector’s performance over a longer horizon also remains strong. The five-year compound annual growth rate (CAGR) of individual APE for private insurers (FY20TD-FY25TD) stands at 13.7 per cent, demonstrating their consistent ability to grow despite market fluctuations.
While the long-term outlook for the industry remains positive, there are emerging concerns that investors need to monitor closely. These include the potential impact of new surrender value regulations, increased competitive pressures, and shrinking margins.
The performance gap between private insurers and LIC highlights a shift in the life insurance market, as private players continue to gain ground with their aggressive strategies and product offerings. (ANI)

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