 "Insurance, digital")
The life insurance industry registered a decline of 8.4 per cent in net profit at Rs 7,728.30 crore in 2019-20, Irdai's annual report showed on Wednesday.
The 24 life insurance companies had posted profit after tax of Rs 8,435.81 crore in 2018-19.
"During the financial year 2019-20, the life insurance industry reported a profit after tax of Rs 7,728 crore as against Rs 8,436 crore in 2018-19. Out of the 24 life insurers in operation during the year, 17 companies reported profits," said the Insurance Regulatory and Development Authority of India (Irdai) Annual Report 2019-20.
The country's largest and only state-owned life insurer LIC registered a modest increase of 0.9 per cent in net profit at Rs 2,712.71 crore during the year as against Rs 2,688.50 crore in the preceding fiscal.
The remaining 23 private sector players registered a decline of 12.7 per cent in their collective net profit at Rs 5,015.59 crore as against Rs 5,747.31 crore in FY19.
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Irdai said the investment income (excluding dividend distribution tax) of all the life insurers during the year was down by 18 per cent at Rs 2.34 lakh crore. LIC's investment income grew by 6 per cent to Rs 2.37 lakh crore.
On the other hand, the private sector companies faced loss with investment income (including the negative movement in the fair value of unit linked assets) coming in at (-) Rs 3,105.97 crore. There was investment income of Rs 61,158.07 crore in 2018-19.
During the year 2019-20, LIC proposed Rs 2,698 crore as dividend to the Government of India (shareholder), as against Rs 2,661 crore in 2018-19.
Six private life insurers paid/proposed dividends of Rs 1,216 crore, down from Rs 1,781.26 crore a year ago.
The six players who paid out dividends in FY20 were ICICI Prudential, Max Life, Shriram Life, Bajaj Allianz, Star Union Dai-ichi Life and IDBI Federal Life.
In total, the dividend paid by the life insurers was at Rs 3,913.49 crore in FY20, down by 11.9 per cent from Rs 4,441.86 crore in the previous fiscal year.
Irdai said Sahara India Life Insurance had declared dividend of Rs 23.20 crore for FY18-19, which was cancelled on the directions of the Authority.
With regard to death claims, the insurers settled as many as 8,74,849 claims, with a claim settlement ratio of 96.76 per cent. While LIC settled 7,58,916 claims (96.69 per cent), the collective settlement by the remaining private sector players was 1,15,933 (97.18 per cent).
Further, Irdai said during the first decade of insurance sector liberalisation, the sector has reported increase in insurance penetration from 2.71 per cent in 2001 to 5.20 per cent in 2009.
Insurance penetration is measured as the percentage of insurance premium to GDP.
"Since then the level of penetration was declining and reached 3.30 per cent in 2014. However, the insurance penetration started again increasing from 2015 and in 2019, penetration was 3.76 per cent," said the annual report.
Insurance density, which is calculated as the ratio of premium to population (per capita premium), has reported consistent increase from USD 11.5 in 2001 to USD 64.4 in 2010.
Since then, the level of density was declining up to 2016. However, it started increasing from 2017 and in the year 2019, the insurance density was USD 78, said the insurance regulator.
Measure of insurance penetration and density reflects the level of development of insurance sector in a country.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
