According to a report by CRISIL, the IPO-bound national insurer Life Insurance Corporation (LIC) is not only the nation’s biggest in terms of home-market share, with more than 64.1 percent of total gross written premium as of 2020 but also the one with the highest return on equity, at 82%, in addition to being the third-largest in terms of life insurance premium.
While LIC’s market share has been continuously falling from 100% in the pre-2000 era to 71.8% in 2016 and further down to 64.1% in 2020–SBI Life, the country’s second-largest, had just 5% in 2016 and 8% in 2020, according to CRISIL in a study completed in November 2021 but not yet made public.
According to the research, LIC’s market share is unsurpassed internationally, at 64.1 percent or with a gross written premium (GWP) of USD 56.405 billion, with no other life insurer anywhere else having such a high market share.
Ping An Insurance and China Life Insurance, for example, account for 21% and 20% of the Chinese market, respectively. Nippon Life, the largest Japanese participant, has only 16.2% of the market.
The top 15 companies in the United States control 60% of the overall market. Northwestern Mutual Life ranks first at 8.4%, followed by Metlife Inc at 7.6% and New York Life at 7.5%. However, nowhere else in the world is the market share differential between the largest and second-largest as wide as it is in India, with the second-largest operator, SBI Life, having only 8% market share compared to LIC’s 64.1%.
Similarly, LIC has the best rate of return on equity (RoE) among its peers, at 82% as of March 2021.ROE is a measure of a company’s profitability and efficiency in producing profits. This is followed by the world’s largest insurer, Ping An Insurance of China, with 19.5%, Aviva with 14.8%, and China Life Insurance with 11.9%.
