67079Looking for health insurance? Treatment cost of these maladies will not be covered!

The insurance industry has seen yet another dip in new business premiums (NBP). After a borderline growth in NBP in June (Y-O-Y), the NBP has declined again in July. Hit hard by the devastating Covid-19, NBP had fallen in May too.

In July, 24 life insurance companies raked in NBPs to the tune of Rs 20,434.72 crore, which was 11% lower than what they collected in NBP in July 2020.

The reason for the downward trend can be attributed to the contraction in business activity seen by the Life Insurance Corporation of India (LIC).

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

Lacklustre show by LIC

Private insurers bucked the trend to register a 7.53% rise in NBP in July.

State-owned LIC, on the other hand, witnessed a 21% contraction (Y-O-Y) at Rs 12,030.9 crore.
In the previous month, LIC had reported Rs 21,796. 3 crore in NBP, down 4.13% (Y-O-Y).

On a month-on-month basis, LIC’s NBP shrank by 44%. This plunge was due to a sharp fall in individual single premium and group single and non-single premium.

Muted Q1

The second wave of Covid-19 had hit insurers hard in the first quarter. The business, however, picked up in subsequent days, at least for the private insurers.

In Q1FY22, the premium collection of the insurance industry was up nearly 7% (Y-O-Y) at Rs 52,725.3 crore, which was aided by an outstanding 33.7% growth in private insurers. LIC’s NBP in the same time period declined by 2.5% (y-o-y) to Rs 35,600.7 crore.

Mixed bag for private players

As far as private sector life insurers are concerned, SBI Life Insurance reported a dip of 5.67% (y-o-y) in NBP in July, while HDFC Life saw a nominal increase of 4%. On a Y-O-Y basis in July, ICICI Life reported a whopping 36.3% jump in NBP, while Max Life’s NBP surged by 22.14%.

The profitability of insurance companies took a massive hit due to a surge in death claims in Q1FY22, a result of the devastating second wave. While the pressure exerted by claims has reduced, the possibility of a potential third wave has kept insurance companies in a state of panic and anxiety.