The life insurance industry,consisting of 24 players,continues to see large erosion of  its monthly business performance due to the countrywide lockdown caused by the Covid -19 pandemic, as during the first two months of the fiscal 2020-21, till  May, the sector at Rs 20,466.76 crore, has lost 28 per cent year-on-year(y-o-y) of its new premium income. 

Despite placing all counter measures,mainly opting for digital mode, almost all big players including Life insurance behemoth Life Insurance Corporation(LIC), private sector majors like  HDFC Life, SBI Life, ICICI Pru Life(marginal fall in May but has stayed positive one during first two months), Bajaj Life and Max Life  Insurance have taken a large hit in their new premium income during the period.


However, a few mid-sized life insurers like Tata AIA Life, Canara HSBC OBC Life and Aviva have seen postive growth in their new premium income during this challenging period..

During the month of May,the industry, at Rs 13,739 crore has lost 26 per cent y-o-y of its new premium income..  

In terms of policies,the industry has seen its numbers plunging by almost 60 per cent y-o-y to 11, 12,2411 in the first two months of the fiscal.For the month of May, at 5,071,992, the industry has almost lost 65 per cent in the same category.

The state owned LIC’s new premium income, at Rs 13793.18 crore, in the first two month of the fiscal, has fallen by 26 per cent y-o-y while for the month of May it has dipped by 24 per cent to Rs13,793 crore.The LIC has managed to sell 81,0828 policies till May, a 61 per cent fall over the corresponding period of 2019-20. 

The private sector life insurers,at Rs 6,673.58 crore,has suffered  a loss of 32 per cent y-o-y in its new premium income till May and for the month of May these players at Rs 3,527.48 crore has taken a hit of 28 per cent over the corresponding period of 2019-20        


The private sector players, at 61,35.45, have sold 25 per cent  less new policies till May while for the month of May their number of new policies  sold have fallen by 19.35 per cent y-o-y to 38,991..


Commenting about his company's postive growth during lockdown period,Rishi Srivastava, MD & CEO, Tata AIA Life Insurance said, “The   results in terms of new premium income are a reflection of our customer-centric Business Continuity measures. W'e were swift in transitioning our entire suite of services to the virtual mode to ensure minimal disruption in consumer service.The overall industry growth in YTD May 2020 declined by 30 per cent  whereas Tata AIA grew by 16 per cent largely owing to protection business contribution. We have continued to be the pre-eminent leader in protection solutions with the highest Retail Protection mix in the industry at 44 per cent.''


Explaining the future trend in the domestic life insurnace industry, he said,the industry also saw a surge in sales via digital channels in this period. This upward trend is likely to continue and become a major contributor as a distribution channel. Post lockdown too, consumer buying behaviour and journey will continue on digital modes as this is very convenient and time-saving and clearly demonstrates consumer preference.

The uncertainty that has come with the current situation, has prompted consumers to seek options that bring security and cover risk. It is a trend that is likely to continue as Term Insurance offers the much-needed security that families look for to protect the future of their loved ones, he said.

Commenting on her company having generated a positive growth in its new premium income, Anjali Malhotra, chief customer, marketing, digital and IT Officer, Aviva Life Insurance, said,“Our response to the Covid situation is a combination of many moving parts. Aviva already had its focus on customer and digital first approach to ensure business continuity and stakeholder communication.Post the lockdown due to Covid-19, we immediately realigned our business continuity plans for company’s growth and development. We revaluated our backend infrastructure to manage employee experience and  transformed digitally to assure quality and enhanced customer experience. The company expanded its customer engagement by using  digital tools and Aviva MST to provide unique digital experiences to customers, resulting in conversions. Our team continued building trust  communicating through video calling, educative videos, Alisha Chatbot which helped us in narrating our story remotely.


“Hopefully, we will soon be able to leave the phase of Covid-19 behind us. It is almost certain that the world after Covid-19 will never be the same.  At Aviva, we strongly believe that right now we must focus on looking after one another and working together to fight this pandemic.  We are putting in our best efforts to support our employees and communities around us  to emerge stronger and better,”said Malhotra.


According to a report by Motilal Oswal, the private life insurnace players' individual weighted received premium (WRP) declined 32.1 per cent in May'20 (v/s -40.3 per cent YoY in Apr'20) while industry posted decline of 19.8 per cent YoY (v/s -43.7 per cent YoY in Apr'20).


The decline was mainly due to the COVID-19 outbreak, which continues to weigh down business performance. For FY21YTD, private players' individual WRP plunged 35.5 per cent YoY; for the industry, it dropped 30% YoY.


Amongst the listed players, Max Life witnessed the lowest decline of 20 per cent  YoY while HDCF Life saw a decline of 33 per cent YoY. SBI Life/IPRU Life reported decline of 46 per cent/52 per cent YoY.


 Amongst mid-sized players, Bajaj Allianz witnessed decline of 18 per cent YoY while Birla Sun Life/Tata AIA saw growth of 10 per cent/3 per cent YoY.


The LIC reported much lower decline of 3.1 per cent YoY (v/s -47.9 per cent YoY in Apr'20) in individual WRP. During FY21YTD, LIC's individual WRP declined 23.0 per cent YoY.