LIC Records a 50% Drop in New Business Premium

Published : 18 May 2023

LIC records a 50% Drop:

LIC’s new business premium (NBP) dropped by 50.41 YoY to Rs 5,810.1 crore in April 2023 due to a massive decline in group single premium

A drop of New Business Premiums in the Insurance Industry 

The new business premium for the entire life insurance sector also fell by 30% in April compared to the previous year. However, businesses in the private sector showed a growth of 8.5%.

What is New Business Premium? 

The NBP is the annual premium generated by new policies. This gives an idea of the total premium collected from the new businesses and includes the first year's premium and a single premium.

Reason for the drop in New Business Premium

The insurance industry typically experiences a slow start to the fiscal year. Still, this year's sharp decline in premiums is probably related to the government's decision to start taxing high-value insurance products this fiscal year.

From 2023–2024, the Union Budget proposed taxing insurance premiums that exceed Rs 5 lakh annually.