The total benefits paid by private life insurance companies to policyholders rose by 5.98 per cent to Rs 1.57 trillion during 2022-23.
This figure stood at Rs 1.49 trillion in the corresponding year-ago period.
On the other hand, Life Insurance Corporation of India (LIC) paid out 4 per cent fewer benefits at Rs 3.39 trillion from Rs 3.53 trillion in 2021-22.
The total benefits paid by the insurance companies dropped to Rs 4.96 trillion during 2022-23 from Rs 5.02 trillion in the corresponding year-ago period.
The total benefits paid in the period under consideration constitutes 64 per cent of the net premium.
As of March 2023, LIC dominated the market with 62.58 per cent share and the private insurers accounted for the remaining 37.42 per cent of the life insurance industry.
According to the latest data released by the Insurance Regulatory and Development Authority of India (Irdai), the total benefits paid by the industry moderated on the back of falling death claims and maturity.
The death claims paid during the period declined by nearly 32 per cent to Rs 41,457.3 crore from Rs 60,821.8 crore in 2021-22.
Similarly, maturity payments fell by 11.1 per cent to Rs 2.13 trillion from Rs 2.4 trillion.
In case of individual life insurance business, out of the total 1.076 million death claims, the companies paid 1.06 million claims worth Rs 28,611 crore.
The claim settlement ratio of the industry during the period gell to 98.54 per cent from 98.64 per cent last year.
In group life insurance business, of the total 1.248 million claims, 1.24 million claims were paid for Rs 17,178 crore with the claim settlement ratio standing at 99.35 per cent.
On the other hand, the surrender or withdrawals paid by the life insurance companies rose by 25.62 per cent to Rs 1.99 trillion in 2022-23 from Rs 1.58 trillion in the previous year.
The surrender value paid by private companies saw an increase of 37.64 per cent to Rs 86,943.27 crore from Rs 63,166.9 crore.
Whereas, LIC’s surrender value paid rose by 17.63 per cent to Rs 1.11 trillion, which accounted for 56.27 per cent of the segment.
Further, the benefits for Unit-Linked Insurance Plan (ULIP) accounted for 62.51 per cent for private insurers and 1.56 per cent for the public sector company.
According to the annual report, “Swiss Re forecasts global premiums for life insurance to grow by 0.7 percent in real terms in 2023 in comparison to the 10-year trend of 1.3 per cent growth.
"High in?ation leading to high level of policy surrenders is likely to impact the pro?tability of the sector.”
Recently, Irdai released an exposure draft to increase the surrender value for non-linked policies (both par and non-par) products of life insurance companies.
According to experts, the measure, if implemented, is likely to affect the overall margins of the life insurers.
The companies are expected to submit their response for the draft by January 3, 2024.
The benefits paid for annuity products by the companies increased by 13.42 per cent to Rs 20,696.26 crore from Rs 18,247.97 crore a year ago.
