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Covid: Life insurance sector sees 18.6% drop in first-year premium, says report

Hit exhausting by the coronavirus pandemic, the life insurance sector witnessed an 18.6 per cent drop in the primary yr premium to Rs 49,335 crore in the April-June quarter of the present monetary yr, in accordance with a report by CARE Rankings.

The general sum assured additionally declined 12.9 per cent to Rs 8.Eight lakh crore in the June 2020 quarter, in contrast with Rs 10 lakh crore (which was a rise of 17.6 per cent) in the corresponding interval of the earlier yr.

The sector had seen their first-year premium declines of 32.6 per cent and 27.9 per cent in April 2020 and Might 2020, respectively, the report stated including that the June 2020 quarter figures are indicative that the sector is shifting in the direction of restoration.

“The life insurance sector continues to report a drop in their first-year premium collection as businesses have been severely impacted by the Covid-19 pandemic. The sector reported a decrease of 18.6 per cent in the first-year premium to Rs 49,335 crore in Q1FY21 from Rs 60,637 crore in Q1FY20,” it stated.

Attributing the decline in enterprise in the primary quarter of the present fiscal to lockdown and enterprise disruption, the report stated, “Growth could potentially return in the second or third quarter of 2020-21. Distribution channels could see significant realignment, with digital rising at the cost of individual agents/ bancassurance.” It added that the first-year premium for Life Insurance Company (LIC) noticed a drop of 18.5 per cent in first quarter of 2020-21, in opposition to a rise of 81.2 per cent a yr in the past.

Non-public sector corporations through the first quarter until Might 2020 witnessed a fall of 19.2 per cent, in contrast with a development of 32 per cent in the April-June interval of 2019-20, the report stated.

“LIC continues to maintain its dominant share in the first-year premium for Q1FY21 (LIC share of 74 per cent as against 26 per cent share of private companies); the share in sum assured has remained mostly flat in Q1FY21 when compared with Q1FY20,” the report stated.

The report additional stated that even because the trade reported destructive development for the primary quarter of the monetary yr, 5 insurance corporations (Aditya Birla Solar Life, Tata AIA Life, Canara HSBC OBC Life, Edelweiss Tokio Life, and Aviva Life) really reported a development in their first-year premium assortment.

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