Life insurance firms see 21% rise in new business premium in February
Life Insurance Corporation recorded 24% growth in new business premium to Rs 12,920.57 crore
Following tepid growth in the month of January, life insurers registered a growth of 21% growth in February. The new business premium (NBP) increased to Rs22,425.21 crore compared with Rs18,533.19 crore in the corresponding period of the previous year. The premium earned for new policies for a particular year is known as the new business premium (NBP).
Life Insurance Corporation of India (LIC), the largest insurer in terms of assets under management, recorded 24% growth in NBP to Rs 12,920.57 crore, compared with Rs 10,404.68 crore in the previous year. The rise in new business premium has been registered after LIC’s NBP declined 2% in January. In November and December, it contracted by 35% and 15%, respectively.
The life insurance industry showed degrowth after the outbreak of the pandemic. The industry has now started recovering after the uptick seen in the economy. Private insurers also showed a growth of 17% in February with premium collection increasing to Rs 9,504.64 crore compared with Rs8,128.51 crore in the corresponding period in the previous year. The last quarter (January-March) is considered to be the most productive quarter for insurers as a large number of people buy insurance during this time for the purpose of saving taxes. SBI Life showed the highest growth at 61% while ICICI Prudential’s showed negative growth by 19%.
The life insurance industry registered a decline of 8.4% in net profit at Rs7,728.30 crore in 2019-20, according to Irdai’s annual report. The 24 life insurance companies had posted a profit after tax of Rs8,435.81 crore in 2018-19.
“During the financial year 2019-20, the life insurance industry reported a profit after tax of Rs 7,728 crore as against Rs 8,436 crore in 2018-19. Out of the 24 life insurers in operation during the year, 17 companies reported profits,” said the Insurance Regulatory and Development Authority of India (Irdai) Annual Report 2019-20.
Similarly, the gross premium underwritten by non-life insurers increased by 14% in February with premiums of Rs 15,767.09 crore compared to Rs 13,805.82 crore in the corresponding period in the previous year. Premium income of non-life insurers grew by 6.7 % in January and by 12% in December.