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New premiums shrink 3% in December for life insurers; private insurers post 22% growth

LIC saw a 14.9 percent YoY decline in first-year premiums to Rs 14,345.7 crore in December 2020.

January 08, 2021 / 07:44 PM IST
 
 
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New business premiums saw a 3 percent year-on-year (YoY) decline in December 2020 led by a 14.9 percent decline in first-year premiums for Life Insurance Corporation of India (LIC).

The first year premium collections stood at Rs 24,383.42 crore for December 2020. For the April 1-December 31 period, the premiums saw a 1.7 percent YoY decline to Rs 1.91 lakh crore for life insurers.

Private life insurers, on the other hand, saw a 22 percent YoY growth in new premiums in December. Among the listed insurers, HDFC Life saw a 27 percent YoY growth to Rs 1,910.27 crore in December.

ICICI Prudential Life saw a 32 percent YoY growth in new premiums to Rs 1,469.45 crore in December. SBI Life Insurance saw a 12 percent YoY growth in new premiums to Rs 2,322.44 crore in December.

LIC saw a 14.9 percent YoY decline in new premiums in December to Rs 14,345.7 crore. This was primarily on account of 86.8 percent decline in group regular premiums. Individual regular premiums grew 1.9 percent while individual single premiums grew 53 percent.

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The life insurance sector has stayed under pressure ever since the Coronavirus outbreak and nationwide lockdown in March 2020. While green shoots were visible from July onwards, the industry started seeing degrowth again from November.

The month of November 2020 was weak for the life insurance business due to a high base, said a report by Kotak Institutional Equities. As per the report, private life insurers posted a 7 percent year-on-year (YoY) decline in individual annualised premium equivalent (APE) in November 2020.

The report said the APE increase of 14 percent YoY in October 2020 was on the back of a high base.

In the January-March period which is the busiest season for insurers owing to the tax-savings season, it is expected that the life insurers will see growth coming back. Industry estimates suggest that the life insurance sector will see flat APE growth in FY21.

The life insurance industry is expected to see flat growth in annualised premium equivalent (APE) in FY21, according to a Kotak Life Insurance outlook.

APE refers to 100 percent regular premiums and 10 percent single premiums collected by an insurer.

Going forward, Kotak Life expects the life insurance industry to sustain growth rates of around 15 percent levels in the next five years.
Moneycontrol News
first published: Jan 8, 2021 07:44 pm

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