New business premium (NBP)

What is new business premium?

New business premium (NBP) is the premium a life insurer receives from policies it sold during a period. It has two parts: the first year premium on regular and limited premium policies (the instalments due in the first policy year) and the full amount of single premium policies. Premium received in later years on the same policies is renewal premium, not new business.

NBP is the most widely reported sales figure in Indian life insurance. The Life Insurance Council publishes it monthly for every insurer, and the trade press uses it for market share tables.

How NBP is reported in India

The IRDAI annual report defines new business premium as first year premium plus single premium. For 2024-25 it reported:

Source: IRDAI Annual Report 2024-25, Table I.9.

Two features stand out. Single premium made up more than two thirds of industry NBP. And LIC wrote the larger share of NBP, while private insurers wrote most of the first year premium, the part that comes from regular premium policies.

NBP is reported for individual and group business separately. Individual NBP is the figure most relevant to retail distribution. The Life Insurance Council also publishes individual rated premium (IRP), which counts single premiums at 10%, and listed insurers report their private market share on that basis.

Worked example (illustrative numbers)

In a month a life insurer sells:

• 4,000 regular premium policies with annual premium of ₹50,000 each, of which half pay annually and half pay monthly (₹4,167 a month).
• 100 single premium policies of ₹10 lakh each.

NBP collected in the month = annual payers (2,000 × ₹50,000 = ₹10 crore) + first monthly instalments (2,000 × ₹4,167 = about ₹0.83 crore) + single premiums (₹10 crore) = about ₹20.8 crore. The remaining 11 monthly instalments will also count as first year premium as they are received during the first policy year.

NBP vs APE

NBP adds a ₹10 lakh single premium and a ₹10 lakh annual premium as equal. They are not: the annual premium policy will bring in ₹10 lakh every year for its premium paying term. Annualised premium equivalent corrects for this by counting single premium at 10%. Insurers and analysts use NBP for market share and cash flow, and APE for comparing sales effort and profitability.

What NBP means for distribution

• Know which figure your targets use. A bank partner measured on NBP is rewarded for large single premium deposits. One measured on APE or individual rated premium is pushed toward regular premium business. The choice shapes the product mix a channel sells.
• NBP growth can be volatile. Group single premium and annuity business swing with interest rates and large corporate mandates. Retail distribution leaders should track individual NBP and individual APE separately.
• First year premium is what funds acquisition. First year commission and most sales costs are paid out of first year premium, so a channel's first year premium against its cost is a quick check of its economics.
• Monthly data is public. Life Insurance Council figures let any distributor see how a partner insurer's new business is moving against the market, each month.
• Tax and pricing changes show up quickly. The GST exemption on individual life policies from 22 September 2025 lowered the price customers pay. SBI Life said the exemption aided demand in the October to December 2025 quarter.