Life insurance cos hit a growth bump again in May

Mumbai: Business growth of life insurers was yet again impacted in May due to the economic slump triggered by the lockdown to combat Covid-19. New business shrunk by 25.3 per cent year-on-year during the month, show data from IRDAI. For both April and May, the contraction was 30.7 per cent.New business premium (NBP) at the Life Insurance Corporation of India (LIC) dropped 24 per cent YoY to Rs 10,211 crore during the month. Sequentially, however, the insurer recorded 185 per cent growth, the data showed.The state-owned insurer recorded a year-on-year contraction in individual and total annualised premium equivalent (APE) at 3 per cent and 27 per cent, respectively, Sequentially, however, the two parameters jumped over two times. LIC sold 6.25 lakh policies in May, down 50 per cent YoY.The 23 private sector insurers collectively recorded a 28 per cent YoY drop in new business premiums in May. They sold 2.81 lakh policies in the month, down about 19 per cent YoY. 76293906New business premium is the premium acquired from new policies for a particular year whereas the APE is a common measure of gauging the business sales in the life insurance industry.“The NBP, Total APE and individual APE declined 28 per cent, 23 per cent and 32 per cent YoY in May 2020 for private life insurers respectively,” as per a report by ICICI Securities. “LIC witnessed only 3 per cent decline in individual APE in May 2020. This is significantly better than private insurers.”ICICI Prudential, HDFC Life, SBI Life, Bajaj Life and Max Life all saw their premium incomes take a hit in May. However, Tata AIA, Canara HSBC OBC Life, Future Generali and Aviva Life bucked the trend and recorded positive growth for the month, the data showed.

from Economic Times https://ift.tt/2zkrlZB