The Indian life insurance market

The Indian market accounts for just one life public company, Life Insurance Corporation of India (LIC). It reported 66.5% of the market’s life revenues in 2018. The other 23 private companies make the remaining 33.5% of the premiums, compared to 30% ten years earlier. From 2009 to 2018, life premiums reported by private companies had grown by 39% against 17% for LIC.

indiaThe first three life companies account for 18.32% of premiums: SBI Life Insurance ranks first of the private life companies with a market share of nearly 6.5%, well behind the 66.4% of LIC. SBI Life is followed by ICIC Prudential (6%) and HDFC (5.7%). The remainder of the market, that is, 20 companies, are sharing the remaining 15.26% life premiums.

Life insurance companies in India: net income

Following the losses sustained in 2009, the private sector has recovered, posting positive results year after year. With a figure of 1.308 billion USD, the 2017 year reported the highest results of the private sector during the 2009-2018 decade.

In spite of the extremely high turnover, public company LIC has reported low profits. Since 2010, the results of the entire private life sector have been higher than LIC’s.

Among private companies, ICICI Prudential stands out, reporting the best results.

Profitability of life insurance companies in India

Life companies’ profitability calculated according to the net result reported to the written premiums has highlighted the wide gap between private life companies and LIC. The private sector has, over the past six years, posted a net result 5.6 times higher than the one reported by the public sector. By comparison, with premiums 2.5 times lower than those of LIC, the private sector is reporting more than double the profits collected by the public life insurer.

It is worth mentioning that during the recent decade, LIC’s net result has never exceeded 1% of the written premiums. In 2015, LIC’s net profit was set at 0.94%, that is, the best performance exhibited by the public life insurer during the last decade.

After an unprofitable 2009 year, the private life sector has recovered significantly reaching a rising profitability of 7.03% and 7.67% in 2011 and 2012 respectively. It is important to note that that the net result reported to the written premiums has been regularly shrinking in this sector since 2012.

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