After seeing a stable premium collection since December and showing strong growth in the last three months, private life insurance companies are once again witnessed a dip in collections in May due to COVID-19 related restrictions in mobility.
Total premium collection by life insurers fell by around 5 percent in May from year-ago levels, but showed strong growth of 33 percent from month-ago levels (ie compared to April 2021). Life Insurance Corporation of India (LIC) accounted for a lion's share of the month-on-month improvement in premium collections.
LIC's total premium collection in May was down 12 percent on a year-on-year basis but it grew by 84 percent on a month-on-month basis, lifting the overall numbers for the industry. The retail/individual Annual Premium Equivalent (APE) growth for LIC also grew by 4 percent over the previous month.
For private life insurance companies, the premium collection grew at a decent pace on a year-on-year basis but saw a significant decline when compared to the previous month.
For HDFC Life Insurance, the total premium in May grew by 47 percent on a year-on-year basis, but it was down 22percent when compared to the previous month. The retail APE for HDFC Life Insurance also saw a decline of over 3 percent on a month-on-month basis.
The premium collection in May for Max Life Insurance grew at 25 percent on a year-on-year basis but again declined 16 percent when compared to the previous month. The retail APE for Max in May was also down 23 percent when compared to April 2021.
The impact on SBI Life Insurance's performance was most severe. Premiums for the insurer in May grew only by 1.5 percent on a year-on-year basis and dropped by over 30 percent on a month-on-month basis. Retail APE for the insurer was also down by over 25 percent when compared on a month-on-month basis.
ICICI Prudential Life Insurance managed to hold some growth. Its total premium in May was down 4 percent on a year-on-year basis but premiums grew by 1 percent on a month-on-month basis. The retail APE was however down 5 percent on a month-on-month basis.
The clear trend which emerges is that private life insurers managed to grow at a decent pace on a year-on-year basis supported by a weak base effect but the impact of COVID-19 restrictions in different states reflects in the premium collection for the month of May. Hopefully, premium collections will rise in June as restrictions lift off.
(Edited by : Jomy Jos Pullokaran)