Life insurers new premium collections drop 32% in March

Life insurance players saw nearly all financial metrics such as sum assured, first year premiums, policies issued, and lives covered decline significantly in March which could be reflected in a washed out fourth quarter in the upcoming earnings of the listed insurers, writes The Economic Times.
 
The overall industry – with 24 players - saw 32.2% year-on-year (YoY) decrease in new premium collection to Rs 25,409.30 crore in the month whereas number of policies underwritten, and the number of lives covered in the month reduced by 66 percent and 41 percent respectively, latest data released by IRDAI showed. 
 
However, for FY20 the sector saw a 20.6% YoY increase in first year premiums at Rs 2.58 lakh crore. While the country’s largest insurer Life Insurance Corporation of India (LIC) saw a 25.2% growth in new premium to Rs 1.78 lakh crore, for the month of March 2020, the IPO-bound insurer saw a 31.1 percent decline in first year premiums to Rs 17,066.57 crore. 
 
LIC ended FY20 with a 68% market share of first year premiums, IRDAI data revealed. 
 
Among the listed insurers, HDFC Life Insurance posted a 16.2 percent YoY rise in new premiums for the full year 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 and SBI Life Insurance posted a 20.3 percent YoY rise in premiums to Rs 16,598.82 crore. Max Life’s new premiums rose 8.2% to Rs.5583 crore. 
 
Disruptions in distribution channels, mostly agent networks and bancassurance partnerships due to covid-19 related lockdown is primarily the reason for a washed-out March, according to experts. In the said month, HDFC Life saw a 19.3 percent YoY drop in first year premium collection while ICICI Prudential Life and SBI Life saw a 32.3 percent and 41.4 percent drop respectively while Max Life posted a 27% decline.

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