Life insurance companies reported a year-on-year (YoY) growth of 18 per cent in new business premium in August despite a larger base, driven by healthy growth in premiums from private sector insurers.

Data released by the Life Insurance Council showed that the new business premium (NBP) of life insurers in August stood at Rs. 32,856.38 crores was shown. Private sector insurance companies' NBP rose 24 percent to Rs 10,974.25 crore, while Life Insurance Corporation (LIC)'s NBP rose 15 percent to Rs 21,882 crore.

Private insurers saw strong growth in premiums due to healthy rise in group single premium and group annual renewable premium. LIC's premium hike was largely due to increase in group single premium.

NBP is the premium received from new policies for a particular year. It is the sum of the first-year premium and the single premium calculated during the year.

Brokerage houses earlier flagged that NBP's growth in August would not be as strong as seen in the past few months, primarily due to a larger base. NBP of life insurance companies had seen a jump of 91 per cent year-on-year (YoY) in July.

Among large private sector insurers, ICICI Prudential Life's NBP increased by 11.3 per cent, while HDFC Life's and SBI Life's NBP rose by 16.80 per cent and 21 per cent, respectively.

In FY23, so far, life insurers have seen a 44 per cent YoY increase in premiums to Rs. 1.45 trillion, LIC's premium has grown by 49 per cent and private insurers by 35 per cent year-on-year. In the April-June quarter (Q1FY23), life insurers grew their NBP by 40 per cent over the same period a year ago due to a lower base.

According to experts, the premium growth of life insurers shall healthy this year, which will be the first year without any restrictions after the pandemic. While demand for term, annuity and guaranteed products is expected to remain strong, unit-linked products may take a hit due to volatility in equity markets.