Life insurers in March witnessed a big rise in new business premiums (NBP) at 37% -- owing to the strong performance of initial public offering-bound Life Insurance Corporation (LIC), whose NBP rose 51% over the same month in the previous year.

Also, after reporting single-digit growth in FY21, the first full year of the pandemic, the industry is back to double-digit growth in FY22, with the NBP growing at 13%.

In FY22, private sector insurers rang up a growth rate of 23% in NBP to Rs 1.15 trillion, while LIC saw its NBP rise over 8% to Rs 1.98 trillion, resulting in the industry's NBP growing to Rs 3.14 trillion.

At the end of FY22, LIC's market share in terms of NBP stood at 63.5%, a drop of 293 basis points since March 2021.

However, in FY22 growth was lower than what was seen in FY20, when the NBP of grew over 20%. Growth was 7.49% in FY21.

Typically, March is the best month for life insurance companies because the sale of tax-saving policies shoots up during this period. In the month, the industry's NBP jumped to Rs 59,608.92 crore, the data put out by the Insurance Regulatory and Development Authority of India (IRDAI) showed.

"LIC posted strong growth of 51% YoY, mainly on account of 60% YoY growth in group new business premium. Comparatively, the private sector witnessed a YoY growth of 13%, which was balanced with both individual and group segments growing at 13% and 12%, respectively," said Rushabh Gandhi, deputy CEO, IndiaFirst Life Insurance.

"The robust growth in monthly numbers can be attributed to an increase in single premiums for both individual and group segments in the final month of the financial year (with individuals undertaking tax planning measures), with LIC substantially outpacing its private peers for the second month in a row," said Care Edge in a report.

Among listed players, SBI Life's NBP was up 11% while HDFC Life reported a 6% increase. For ICICI Prudential Life it was a meager 1.56% appreciation, shows the data shared by IRDAI.

For Max Life it was a 15% rise in NBP in March while Bajaj Allianz Life Insurance saw a 29.5% increase.

N S Kannan, managing director and chief executive officer, ICICI Prudential Life Insurance, said after the Q4 results of the insurer: "Despite the disruption caused by the third wave of Covid-19, which impacted productivity in January and February, we were able to demonstrate resilience in our operations. In March, we posted the best ever monthly sales by the company in any year since inception. This helped grow our value of new business by 33% year-on-year to Rs 2,163 crore for FY22 with a robust VNB (value of new business) margin of 28%."

When the pandemic came, growth rates plummeted because of supply-side issues, and just when they were stabilising, the second wave hit insurers hard because a large number of death claims ate into their profits. After the second wave, however, growth picked up, with the easing of supply-side issues.

Life insurers have paid around 225,000 Covid-related death claims, amounting to more than Rs 17,000 crore.

The industry saw strong growth in the protection business during the year as awareness and risk perception among consumers grew owing to the pandemic. Guaranteed as well as annuity products also saw good growth during this period. While unit-linked products witnessed muted growth due to volatility in equity markets, they are expected to recover gradually.

LIC, which has traditionally sold more of par products, has indicated its intention of growing its non-par business, which is expected to augur well for the industry, given the huge reach it has.