After witnessing a huge year-on-year slump in new business premiums during the April-June quarter of this year, life insurers – 24 in total – have seen a turnaround in the September quarter (Q2). This has mainly been on account of new business premium rising almost 16 per cent in Q2, indicating a revival, in line with the pick-up in economic activities, show data released by the Life Insurance Council.
In Q2, Indian insurers netted new business premiums (NBP) to the tune of Rs 75,392 crore, with state-owned insurance behemoth Life Insurance Corporation (LIC) seeing a rise of almost 14 per cent to Rs 51,488 crore. NBP of private insurers rose by about 20 per cent to Rs 23,904. 2 crore. NBP is the premium acquired from new policies for a particular year.
The previous quarter had been marred by pandemic-induced lockdowns enforced across the country, and NBP of insurers had plummeted more than 18 per cent.
In September, NBP of life insurers was up 26.47 per cent to Rs 25,366.32 crore, with LIC leading the way. LIC’s NBP rose a little over 30 per cent to Rs 16, 602.84 crore and private insurers saw a rise of 20 per cent to Rs 8,763.48 crore.
The month witnessed strong growth for private life insurers, backed by a powerful performance by HDFC Life, Max Life, Tata AIA, and Bajaj Life. SBI Life exhibited the highest month-on-month growth among large insurers in terms of individual as well as total annual premium equivalent (APE), ICICI Securities said in a note.
The rise in NBP was particularly aided by single premiums (both individual and group), even as non-single premiums were still struggling. While NBP for Q2 is up by almost 16 per cent, cumulative NBP in the first six months of the financial year is still in the red. In the April-September period, insurers netted premiums to the tune of Rs 1.24 trillion, down 0.82 per cent when compared with Rs 1.25 trillion in the same period last financial year. Although the private players have managed to be in the green, with a meager 2.6 per cent growth in NBP to Rs 36,709 crore in the first six months of FY21, LIC has seen a 2.18 per cent fall in NBP to Rs 88,018 crore for the same period.
Industry experts had earlier indicated a revival for the life insurance industry by Q2. Due to the pandemic, insurers are seeing a surge in demand for term products and guaranteed products, while unit-linked products are seeing a slump due to market volatility. From being a push product, insurance has managed to become a “nudge product” due to the uncertainties around the current pandemic, experts say.
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