Life insurers reported a 32 per cent jump in new business premiums (NBP) in October, helped by healthy growth in single premiums and group non-single premiums. This comes after the industry saw a 16 per cent rise in NBP in the September quarter.
NBP is the premium acquired from new policies in a year.
Life insurers, 24 in total, earned NBP of Rs 22,776 crore in October, compared to Rs 17,271.86 crore in the corresponding period last year. In September, NBP was up 26.47 per cent at Rs 25,366.32 crore.
The numbers are in sharp contrast with the decline in business seen by insurers in the initial days of the Covid-19 pandemic. In Q1FY21, NBP had plummeted more than 18 per cent due to the pandemic-induced lockdowns imposed across the country to curb the spread of Covid-19.
The state-owned insurance behemoth — Life Insurance Corporation (LIC) — led the growth in October, with its NBP up 36 per cent at Rs 15,548 crore, compared to Rs 11,422 crore in the same period last year. The private insurers, on the other hand, saw their NBP grow 23.5 per cent to Rs 7,228 crore, compared to Rs 5,849.71 crore in the year-ago period.
In the first seven months of FY21, NBP has gone up a marginal 3.13 per cent to Rs 1.47 trillion, compared to Rs 1.43 trillion in the corresponding period a year ago. While private insurers’ NBP grew almost 6 per cent in the April-October period to Rs 43,937.59 crore, LIC’s NBP grew 2.13 per cent to Rs 1.03 trillion.
The industry bounced back as insurers, especially the large ones, managed to digitise their selling process, capitalising on the increased awareness of insurance among consumers amid a pandemic. Also, the surge in demand for term products, as well as guaranteed products, helped in recovery.
Experts see the demand increasing as life insurance is becoming a “pull product rather than a push product”. They expect Q3 to be better than Q1 and as good as Q2, if not better.
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