Life’s new business premium for the second consecutive month in FY21 Insurance companies have recorded negative growth due to coronavirus outbreaks. In May, the new business premium of life insurers declined by 25.39 per cent to Rs 13,739 crore, from Rs 18,414 crore in the same period a year ago. In the first two months of FY2011, life insurers saw a 30 per cent drop in their new business premiums by about 30 per cent compared to Rs 20,206.6 crore. Saw a fall of Rs 4 crores.
The new business premium is the premium received from policies for a particular year.
While private life insurers, 23 in total, reported a 28 percent drop in new business premiums in May, state-owned insurance behemoth – Life Insurance Corporation (LIC) reported a 24 percent drop in its new business premium. In absolute terms, private insurers earned Rs 3,527.48 crore in May 2020 as opposed to Rs 4,917.34 crore in the same period a year earlier. Similarly, LIC’s premium collection declined to Rs 13,739 crore in May from Rs 18,414 crore.
For the most part of April and May, the country was in lockdown and businesses found it difficult to conduct their operations, despite some comfort from the government. Private life insurers focused more on digital distribution, as traditional modes of distribution – agency force, bancassurance, etc. – were not possible between lockdowns.
In the first two months of FY2011, the new business premium of private life insurance companies is 30. It declined by 1 per cent to Rs 9631.29 crore from Rs 4,7.53.5 crore crore in the same period a year ago. Similarly, LIC’s new business premium fell by 26.49 per cent to Rs 13,793.18 crore in the first two months of FY15 from Rs 18,764.63 crore a year earlier.
Top private life players – ICICI Prudential, SBI Life, HDFC Life, Bajaj Life Insurance and Max Life – reported a decline in their new business premium (NBP) numbers for May. While ICICI Prudential’s NBP declined 2.3 per cent in May, SBI Life saw a 31.29 per cent fall, HDFC Life’s NBP declined by almost 47 per cent, Bajaj Life’s NBP also declined 46 per cent and Max Life. Declined 18 percent.
Only a few private insurers – Aviva Life Insurance, Canara HSBC OBC Life Insurance, Tata AIA Life Insurance and Future General Life Insurance – reported positive growth in NBP in the month of May.
As of May, LIC has the largest share in the life insurance market with 67.39 percent pie. 23 private life insurers make up 32.61 percent of the life insurance market.