Faster growth in group single premia products of LIC, that constitute around 60 per cent of its business, pushed up total new premium income of the life insurance industry by 26 per cent in fiscal 2017 to Rs 1.75 trillion from Rs 1.39 trillion a year ago.
Most of the incremental business was cornered by the the state-run insurance behemoth, whose total first year premium grew 27.22 per cent to Rs 1.24 trillion in fiscal 2017 from Rs 97,777 crore in the previous fiscal, according to the data from the regulator Irdai.
This also helped the market leader to improve its market share to 71.07 per cent in the fiscal from 70.61 per cent a year ago.
Even for the 23 private players, higher growth continues to come from group single products, which contribute around 30 per cent of their business, rather than individual non-single premium plans.
Group single premia of the industry grew 23 per cent to Rs 88,559 crore, making its the biggest grosser, followed by individual non-single premia at Rs 50,500 crore, which expanded by 72 per cent in the reporting year.
"Revival of steady growth for the private sector players happened since fiscal 2015 while the overall industry growth happened in fiscal 2016. Fiscal 2017 saw a double-digit growth for both LIC as well as for private sector players," Amitabh Choudhry, managing director and chief executive at HDFC Life, told PTI.
Whether insurers have succeeded in selling more risk plans as per Irdai's advice, he said the need for protection schemes have been rising over the years. Customers are becoming more aware of the role of such schemes and see them as an important element in risk management and financial planning.
Companies, he said, have been coming out with innovative and feature-rich products in the protection and health segment to address the needs of customers.
Tarun Chugh, the newly-appointed chief executive of Bajaj Allianz Life, said the industry grew at 26 per cent with most players turning the corner and achieving double-digits growth rates.
People are now investing more in financial assets compared to physical ones. Tailwinds like demonetisation brought in more money into the financial system, he said.
According to Chugh, group single premia constitute about 60 per cent of total new business premium of the industry but for private players, it is only 27 per cent of the portfolio.
This segment will continue to grow due to expected increase in gratuity funds, especially with the implementation of the Seventh Pay Commission recommendations.
Credit life business is also witnessing growth which is the other contributor to group single premia, he said.
"The nature of product varies from one company to another. While some have seen a leaning towards single premium, many have sold regular premia policies, R M Vishakha, managing director of IndiaFirst Life, said.
"There is certainly a greater awareness towards risk products. Risk products and Ulips serve two different needs altogether. They are not mutually exclusive," she said.