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LIC dominates insurance market despite losing share

Life Insurance Corp of India (LIC) sold 2.17 crore insurance policies in fiscal 2021-22, up from 2.10 crore the previous year, a growth of 3.54%. Its total premium increased 12.66% to Rs 1.43 lakh crore in March 2022 from Rs 1.27 lakh crore a year ago.

During 2021-22, individual non-single premium rose 8.82% to Rs 30,016 crore from Rs 27,584 crore at the end of March 2021. The total first year premium (FYP) of the life insurer rose by 7.92% to Rs 1.98 lakh crore in March 2022 from Rs 1.84 lakh crore in the previous fiscal.

LIC claims a market share of 63% in total first year premium for financial year 2021-22. The number of policies sold increased by 3.54% to 2.17 crore in the financial year 2021-22 from 2.09 crore in the previous financial year.

Government owned LIC, the largest life insurer in India had filed the draft red herring prospectus (DRHP) for a 5% stake sale by the government on February 13. The issue was initially planned for the last fiscal year but market volatilities due to Russia‘s invasion of Ukraine delayed the process. Market experts have pegged the IPO size at around Rs 65,000 crore.

LIC’s embedded value the core of its market value has been set at Rs 5.39 lakh crore as on 30 September 2021, according to the draft red herring prospectus.

Despite losing market share over the years LIC continues to dominate the insurance ecosystem. Though its 8% premium growth was lower than the 13% recorded by the industry and 23% by private sector players it still has 63% share in first year premiums and 75% share in terms of number of policies sold.

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