Life insurance companies saw a 32.2 percent year-on-year (YoY) decrease in new premium collection to Rs 25,409.30 crore in March 2020 amidst the coronavirus pandemic leading to a lockdown across the country. However, for the entire financial year (FY20), the life insurers saw a 20.6 percent YoY increase in first year premiums at Rs 2.58 lakh crore.
Life Insurance Corporation of India (LIC) continued to beat the industry in premium collection for FY20. The country’s largest insurer saw a 25.2 percent growth in new premium to Rs 1.78 lakh crore. However, for the month of March 2020, LIC saw a 31.1 percent decline in first year premiums to Rs 17,066.57 crore.
COVID-19 led to insurance companies operating offices with only skeletal staff. Agents and banks which are the two pillars of life insurance distribution are impacted due to the lockdown.
Private life insurers saw a 34.2 percent drop in new premium collection for March at Rs 8,342.73 crore. However, for the full year these insurers saw a 11.6 percent YoY rise in first year premiums to Rs 80,919.40 crore.
On one hand, banks hardly had customers walk into branches in March looking to buy life insurance while on the other agents were unable to visit customers for insurance sales.
Among the listed insurers, HDFC Life Insurance posted a 16.2 percent YoY rise in new premiums in FY20 to Rs 17,396.25 crore. ICICI Prudential Life Insurance posted a 20.5 percent YoY rise in new premiums to Rs 12,348.11 crore. SBI Life Insurance posted a 20.3 percent YoY rise in premiums to Rs 16,598.82 crore.
In the private sector, Tata AIA Life Insurance posted the highest rate of growth of 30.9 percent YoY collecting new premiums of Rs 3,241.07 crore for FY20. The insurer saw a 35.6 percent YoY drop in new premium collection for the month of March.
In March, HDFC Life saw a 19.3 percent YoY drop in new premium collection while ICICI Prudential Life and SBI Life saw a 32.3 percent and 41.4 percent drop respectively.
Now, since the finance ministry has allowed salaried taxpayers time till June 30 to complete their tax saving investments for FY20, there could be an increase in new policy sales if the lockdown is lifted on May 3.