Life insurers' new business premiums grow 4% YoY in June after dip in May

In Q1FY22, the life insurance industry reported a 7 per cent increase (YoY) in NBP

The life insurance industry saw an improvement in premium collection in June after witnessing a 5.5 per cent drop the previous month as economic activities picked up in states amid falling Covid-19 cases.

The new business premium (NBP) of life insurers — 24 in total — rose 3.95 per cent year-on-year (YoY) to Rs 30,009.48 crore. 

NBP is the premium acquired from new policies in a particular year. The yearly group renewable premium, which jumped almost three times, aided the growth.

But when compared to the pre-pandemic period (June 2019), the NBP still lags by as much as 6.9 per cent. On a month-on-month (MoM) basis, though, the collection jumped 131 per cent.

In May, life insurers had amassed NBP of Rs 12,976.99 crore.

Private insurers — 23 in all — have taken the lead when it comes to growth in business.

In June, the private life insurance companies collected NBP of Rs 8,213.19 crore, up 33.94 per cent YoY and 32.23 per cent over June 2019 (pre-pandemic) period.

On an MoM basis, the mop-up has doubled for the private sector companies. 

Among the large private sector insurers, ICICI Prudential saw its NBP more than double on a YoY basis to Rs 1,263.19 crore, aided by an exceptional rise in group renewable premiums. HDFC Life and Max Life reported over 20 per cent growth, while SBI Life saw its NBP increase 17. 61 per cent. 

While private insurers have done exceedingly well in getting their business back on track by adapting to the changing needs of the customers, the state-owned insurance behemoth, Life Insurance Corporation (LIC), reported a YoY decline of 4.13 per cent in its June NBP at Rs 21,796.28 crore. In June 2019, LIC had amassed premiums of Rs 26,030.16 crore. However, LIC has more than doubled its NBP in June over May.

In Q1FY22, the premium collection of the life insurance industry was up almost 7 per cent to Rs 52,725.26 crore YoY, aided by a stellar 33.73 per cent growth registered by the private insurers. However, LIC’s NBP in Q1FY22 declined 2.5 per cent YoY to Rs 35,600.68 crore.