Life insurers note 25% drop in new business premiums in May due to Covid-19

For the second sequential month in FY21, new business premium of disaster protection organizations have recorded negative development due to the coronavirus episode. In May, new business premium of life safety net providers contracted 25.39 percent to Rs 13,739 crore from Rs 18,414 crore in a similar period a year back. In the initial two months of FY21, life guarantors saw their new business premium fall just about 30 percent to Rs 20,466.76 crore contrasted with Rs 28,395.90 crore in FY20.
New business premium is the premium obtained from strategies for a specific year.
While private life back up plans, 23 altogether, recorded 28 percent drop in new business premiums in May, state claimed protection behemoth – Life Insurance Corporation (LIC) – recorded a 24 percent drop in its new business premiums. In total terms, private back up plans earned Rs 3,527.48 crore in May 2020 instead of Rs 4,917.34 crore in a similar period a year prior. Also, LIC's top notch assortment dropped to Rs 13,739 crore in May rather than Rs 18,414 crore.
Generally of April and May, the nation was in a lockdown and organizations thought that it was hard to lead their activities, regardless of certain relaxations from the legislature. The private life safety net providers concentrated more on advanced dissemination as customary method of appropriation - office power, bancassurance and so on – was unrealistic in the midst of the lockdown.
In the initial two months of FY21, new business premium of private life safety net providers plunged 30.71 percent to Rs 9,631.27 from Rs 6,673.58 crore in a similar period a year prior. Essentially, LIC's new business premium in the initial two months of FY21 dropped 26.49 percent to Rs 13,793.18 crore from Rs 18,764.63 crore a year prior.

The top private life players – ICICI Prudential, SBI Life, HDFC Life, Bajaj Life Insurance and Max Life – revealed drop in their new business premium (NBP) numbers for May. While ICICI Prudential's NBP dropped 2.3 percent in May, SBI Life recorded a 31.29 percent drop, HDFC Life's NBP plunged just about 47 percent, Bajaj Life's NBP likewise contracted 46 percent and Max Life's numbers dropped 18 percent.