Life insurers' new business premium up 21% in February at Rs 22,425 crore

After tepid growth in January, following two months of consecutive decline, February saw life insurers, 24 in total, recording impressive 21 per cent growth in new business premiums (NBP) to Rs 22,425.21 crore, compared with Rs 18,533.19 crore in the same period, a year ago.

Interestingly, the state-owned insurance behemoth — Life Insurance Corporation (LIC) — has recorded 24 per cent growth in NBP to Rs 12,920.57 crore, compared with Rs 10,404.68 crore, in a departure from the trend seen in other months when LIC’s NBP shrank. In January, LIC’s NBP declined 2 per cent year-on-year (YoY), while in December it contracted by 15 per cent YoY. November saw LIC’s NBP declining by more than 35 per cent.

Private insurers, on the other hand, saw their NBP growing by 16 per cent in February to Rs 9,504.64 crore, compared with Rs 8,128.51 crore in the same period a year earlier. NBP is the premium acquired from new policies for a particular year. Among private players, SBI Life showed impressive growth of more than 60 per cent, HDFC Life’s NBP grew by 20 per cent, and Max Life also had an impressive growth of above 30 per cent. But, ICICI Prudential’s NBP for February de-grew by 19 per cent.

It is important to note that January-March (Q4) is the most productive quarter for life insurers as a large number of people buy life insurance policies because of the tax-saving options it provides. After witnessing growth in NBP for four straight months starting from July, the NBP of life insurers had fallen in November and December. But, it picked up again in January, with the NBP of life insurers growing by almost 4 per cent.

With just a month left for the close of the current financial year, so far, on a cumulative basis, life insurers NBP is slightly in the green, with 0.6 per cent growth over the last financial year. So far, life insurers have earned an NBP to the tune of Rs 2.34 trillion. While the private insurers are showing a growth of almost 9 per cent in this time period, over last year, LIC is still in the red with its NBP de-growing by 3 per cent.

The life insurance industry suffered a body blow at the onset of the pandemic and it was evident in the NBP numbers it posted at the end of Q1FY21. Due to the strict lockdown in place, their NBP contracted 18.5 per cent. But it recovered quickly with the opening up of the economy and surge in demand for insurance products. Hence in Q2FY21, the industry reported a rise of 16 per cent in NBP. However, in Q3FY21, the industry was in the red, again. Experts have earlier said that the life insurance industry may see marginal single-digit growth in this fiscal year.

Source: Business Standard