With Covid-19 Pandemic disruption in play in full swing,the domestic life insurance sector, consisting of 24 players including state owned Life Insurance Corporation, has ended the June quarter of HY 2020-21 with a negative growth both in its new premium income and policies.
The industry has degrown by 18.64 year- on- year(y-o-y) to Rs 49,335.44 in its new premium income in the June quarter.
The industry’s total number of policies have plunged by 35.40 per cent y-o-y to 3105611 during June quarter.
The overall sum assured also declined 12.9 percent to Rs 8.8 lakh crore in the June 2020 quarter, compared with Rs 10 lakh crore (which was an increase of 17.6 percent) in the corresponding period of the previous year.
According to the latest industry figures released by the regulator IRDAI,the industry has taken a hit in all its vital parameters except in group single premium which has grown by 11 per cent y-o-y to Rs 27,086.34 crore in the June quarter of FY 2020-21.
Also the private sector insurance industry, which has sold 5,76.425 new policies, has just managed achieve a positive growth of 1.68 per cent only for the month of June
The life insurance behemoth the LIC,though has improved its market share to 74 per cent in terms new premium income,has seen its new premium income falling by 18.45 per cent y-o-y to Rs 36,530.02 in June quarter of 202-21.Its number of new policies sold during the June quarter have also fallen by 44 per cent y-o-y to 19,15,641
The private sector life insurance industry with the participation major plyers like HDFC Life,SBI Life,ICICI Pru Life and Max Life,Bajaj Allianz Life, Tata AIA, Reliance Nippon Life, Aditya Birla Life,at Rs 12805.42, has recorded a degrowth of 19.17 per cent y-o-y in the June quarter.In terms of new policies,at 1189970, the segment has seen a negative growth of (y-o-y) 14.37 per cent.
Among the the top five private sector life insurers, except Max Life Insurance, companies including SBI Life,HDFC Life,ICICI Prudential Life,Bajaj Allianz Life have experienced negative growth both in new premium income and new policies in June quarter.
“While the industry did go through challenging times at the advent of COVID-19 pandemic, we do see the industry picking up and moving towards better outlook. Contrary to the widespread belief arising from the current COVID-19 scenario, Max Life’s performance for the quarter has been far superior to the industry. Our protection share of 8.6 percent by volume has more than doubled this fiscal. More than 50 per cent of the policies we have written in the last two months are protection policies, as against one third earlier,We have recorded a growth of 13% in Jun’ 20 which has helped increase our market share by 217 bps to 10.7% in Q1 FY21,'' said Prashant Tripathy,MD & CEO, Max Life Insurance. .
“We are very aggressive on designing new products and are looking at bringing varied offerings in both products and riders category to address the customers’ emergent needs in today’s times. We will be bringing a product variant towards the second half of the year, and are looking at launching Covid specific riders to address the incremental demand of the consumers in today’s times,'' he revealed..
Max Life Insurance is already leading with agility and have transitioned its processes onto digital channels to promptly service our customers.Right from sales to new policy issuance to claims management – operations across the entire value chain have been digitized,he explained..
As the nation moved back to its feet with Unlock 1.0, a positive impact was also recorded for the month of June, he said..
“ We are already finding that the demand for life insurance has gone up and is expected to gain further traction in the coming times. People are preferring term to secure the future of their loved ones in these uncertain times and awareness of protection products too is getting a tail wind out of the current situation,'' said Tripathy..
Tarun Chugh, MD & CEO Bajaj Allianz Life Insurance,“As the demand for protection and guaranteed plans is going up due to heightened perception of risk amongst customers, there has also been an increase in renewals at the same time. Customers are keen to stay invested for long-term. Along with this, we are also enabling them.''
According to a reserach report by the Kotak Institutional Equities,private life insurers have reported a decline of 23 per cent yoy in new premium income in the June quarter which is better than the initial expectation of 50-60 per cent decline due to a lockdown for most of this period.Traction in individual protection policies, selective push of non-par business and uptick in business through digital channels were likely drivers while ULIP volumes have remained weak, said the report .
Attributing the decline in business in the first quarter of the current fiscal to lockdown and business disruption,a report by CARE Ratings.report said, "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."
The report further said that even as the industry reported negative growth for the first quarter of the financial year,five insurance companies (Aditya Birla Sun Life, Tata AIA Life, Canara HSBC OBC Life, Edelweiss Tokio Life, and Aviva Life) actually reported a growth in their first-year premium collection.