Corporates rush to buy insurance for employees

NEW DELHI: The Covid-19 pandemic has brought about a big shift in the insurance preference for customers. While the pandemic has made corporates take up the responsibility of providing insurance coverage to their employees by subscribing to group insurance plans, the financial uncertainty the pandemic has created has pushed back individuals from buying into insurance.

In the month of July, group annualised premium equivalent (APE) has reported a strong performance, with 50.3 per cent year-on-year growth.

APE is the sum of annualised first-year premiums on regular premium policies and 10 per cent of single premiums on the new business written during any period.

According to a research report by Emkay Global Financial Services, the share of private players on the APE basis continued its sequential improvement at 49.2 per cent (44.2 per cent in June'20) in July against the peak of 60.2 per cent in February 2020. The share of Retail APE stood at 55.2 per cent against 61.6 per cent in February (before the impact of Covid-19).

"Private players finally managed to bring back their APE growth momentum on y-o-y basis after reporting a steep decline in the last four months. However, growth is mainly contributed by group businesses, whereas the retail individual business is still lagging, with a 7.1 per cent y-o-y decline (similar to a 7.0 per cent fall in June 2020)," the report said.

The data clearly shows the path that insurance business is taking as new premiums are coming from group side while retail subscription still remains slow.

Among listed players, HDFC Life reported positive trend with growth of 12.5 per cent in APE in July 2020.