Insurers’ premiums grow 3% after shrinking in July

After witnessing a double-digit contraction in new business premium (NBP) in July, life insurers are back in the green again, witnessing a marginal year-on-year (YOY) NBP growth of 3 per cent in August. This is owing to a strong performance by private insurers.

NBP is the premium acquired from new policies in a particular year.

In July, life insurers reported an 11 per cent YOY fall in NBP, while in June, they managed a 7.53 per cent increase, following a dip in May due to the second wave of the pandemic.

The life insurance industry reported NBP to the tune of ~27,820.74 crore in August, up 2.88 per cent YOY, despite a 3.8 per cent contraction reported by Life Insurance Corporation (LIC). Private insurers posted a 21 per cent YOY growth in NBP.

The 23 private insurers earned ~8,859.97 crore in NBP in August 2021 compared to ~7,325.58 crore in August 2020, and ~6,440.65 crore in August 2019. On the other hand, LIC earned NBP to the tune of ~18,960.77 crore in August 2021 compared to ~19,714.21 crore in the same period last year and ~17,114. 32 crore in August 2019.

Among the top private insurers, apart from HDFC Life (which saw 6 per cent YOY decline in NBP in August), SBI Life, ICICI Prudential, and Max Life saw their NBP rise by 23.9 per cent, 43 per cent, and 16.5 per cent, respectively.

Compared to the pre-pandemic period (August 2019), NBP of the life insurance industry witnessed an 18 per cent increase. LIC’S NBP grew by 10.8 per cent and private insurers posted a stellar growth of 37.56 per cent.

On a year-to-date (YTD) basis, the life insurance industry saw a marginal 1.63 per cent YOY growth in NBP at ~1 trillion. While LIC’S NBP till August totaled ~66,592.38 crore, down 6.6 per cent YOY, private insurers saw their NBP rise 23 per cent to ~34,388.33 crore.

In the first quarter of FY22, premium collection of the life insurance industry was up almost 7 per cent to ~52,725.26 crore YOY, aided by a stellar 33.73 per cent growth.