Life insurers report 3% year-on-year growth in new business premiums in August


After recording a double-digit contraction in new business premiums (NBP) in July, life insurers are back in the green, with marginal growth of 3% year-on-year (YoY) in August, due to good performance from private insurers.

In July, life insurers reported an 11% year-on-year decline in the NBP while in June, they managed to report a 7.53% increase in the NBP, following a decline in May due to the second pandemic wave.

The life insurance industry reported the NBP to the tune of Rs 27,820.74 crore in August, up 2.88% year-on-year, despite a 3.8% year-on-year contraction reported by the state insurance giant – Life Insurance Corporation (LIC) – in the NBP, as published by private insurers. 21% year-on-year growth in the NBP. The NBP is the premium earned from new policies in a given year.

Private insurers, 23, earned Rs 8,859.97 crore in NBP in August 2021, compared to Rs 7,325.58 crore in August 2020 and Rs 6,440.65 crore in August 2019. On the other hand, LIC gained in NBP to the tune of Rs 18,960.77 crore in August 2021 compared to Rs 19,714.21 crore in the same period last year and Rs 17,114.32 crore in August 2019.

Among the major private insurers, with the exception of HDFC Life, which saw its NBP drop 6% year-on-year in August, SBI Life, ICICI Prudential and Max Life saw their NBP increase 23.9%, 43% and 16.5% respectively.

Compared to the pre-pandemic period (August 2019), the life insurance industry’s NBP grew by 18%, with the NBP LIC increasing by 10.8% and the private insurers’ NBP growing by leaps and bounds. by 37.56%.

Since the start of the year (YTD), the life insurance industry has experienced marginal growth of 1.63% year-on-year from the NBP to Rs1 trillion. While LIC’s NBP through August totaled Rs 66,592.38 crore, down 6.6% yoy, private insurers saw their NBP increase 23% yoy to Rs 34,388, 33 crore.

In the first quarter of FY22, premium collection from the life insurance industry increased nearly 7% to Rs 52,725.26 crore year-on-year, helped by a staggering growth of 33.73 % registered by private insurers. However, LIC’s NBP in the first quarter of fiscal 22 fell 2.5% year-on-year to Rs 35,600.68 crore.

According to Care Ratings, in Q1FY22, premium growth, although moderate, was driven by unit-linked products and protection plans. However, the life insurance industry experienced significant losses in the first quarter of fiscal 22 due to the second wave of the pandemic, and profitability suffered as companies built up provisions / reserves for mitigate the impact of claims.

The main risks such as a delay in economic recovery and the resurgence of covid cases, i.e. a third wave, could have a negative impact on the growth of premiums and the increase in premium rates of companies. plans forward, according to the report.

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