Life insurers, 24 in all, saw an improvement in new business premiums (NBP) in June after a dip in May due to the second wave of the Coronavirus (Covid-19) pandemic. In June, the NBP of life insurers on a year-on-year (YoY) basis rose 4 per cent to Rs 30,009.48 crore as the impact of the second-wave receded and economic activities started picking up again.
However, when compared to the pre-pandemic period (June 2019), the NBP of the insurers still lags by as much as 6.9 per cent. If considered on a month-on-month (MoM) basis, insurers have seen an incredible jump in NBP in June over May. NBP, the premium acquired from new policies for a particular year, of life insurance companies jumped 131 per cent in June compared to May numbers. In May, life insurers had amassed NBP worth Rs 12,976.99 crore.
Private insurers, which number 23, have taken the lead when it comes to growth in business. In June, the private life insurance companies amassed NBP to the tune of Rs 8,213.19 crore, up 33.94 per cent over last year’s June numbers and 32.23 per cent over June 2019 (pre-pandemic) numbers. Furthermore, on an MoM basis, NBP has doubled for private sector life insurance companies.
While private insurers have done exceedingly well in getting their business growth on track by adapting to the changing needs of the customers, the state-owned insurance behemoth, Life Insurance Corporation (LIC), reported a YoY decline of 4.13 per cent in its NBP for June at Rs 21,796.28 crore. In June 2019 (pre-pandemic), LIC had amassed premiums to the tune of Rs 26,030.16 crore. Having said that, LIC more than doubled its NBP in June over May.
In Q1FY22, NBP of the life insurance industry was up almost 7 per cent to Rs 52,725.26 crore over the same period last year (Q1FY21), aided by a stellar 33.73 per cent growth registered by the private insurers. However, LIC’s NBP in Q1FY22 on a YoY basis declined by 2.5 per cent to Rs 35,600.68 crore.
Despite the 7 per cent growth in NBP in Q1FY22 over the same period last year, the insurance industry has still not touched the pre-pandemic levels. When compared to Q1FY20, NBP of the life insurance industry reported a decline of 13 per cent, mainly due to LIC’s drop-in NBP of over 20 per cent. However, private insurers bucked the trend with over 8 per cent growth.
During FY21, the life insurance industry grew by 7 per cent to garner Rs 2.78 trillion worth of new business premiums as against Rs 2.58 trillion in the previous financial year. Private insurers grew by 8 per cent in individual business, while group business saw a growth of 20 per cent. LIC recorded degrowth of 3 per cent in individual business and growth of 1 per cent in the group business.
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