Life insurers record 15% growth in new business premiums in August

In August, life insurers earned NBP to the tune of Rs 27,039.79 crore, compared to Rs 23,554.94 crore in the same period last year

As many as 24 life insurers recorded a 15 per cent growth in new business premium in August, the second consecutive month of growth in new business premiums (NBP) after four straight months of contraction.

NBP is the premium acquired from new policies for a particular year.

Life insurers earned in August NBP to the tune of Rs 27,039.79 crore, compared to Rs 23,554.94 crore in the same period last year. Private life insurers NBP grew 13.74 per cent to Rs 7,325.59 crore this August, compared to Rs 6,440.62 crore in August 2019. State owned Life Insurance Corporation recorded 15.19 per cent jump in NBP to Rs 19,714.21 crore compared to Rs 17,114.32 crore.

Despite growth in July and August, the cumulative NBP for life insurers in April-August period of FY21 showed a 6 per cent decline at Rs 99,361.32 crore as compared to Rs 1.05 trillion in the same period in FY20. Similarly, LIC’s NBP in the said period declined 7.5 per cent to Rs 71,415.18 crore, compared to Rs 77,220.97 crore. The private insurers also saw their NBP decline almost 2 per cent in the same period in FY21 over last financial year.

As the business is recovering gradually from the initial drop, due to the stringent lockdown, insurers are saying they are seeing increased demand for pure protection products from consumers. This has also prompted the insurers to have a re-look at their product mix. There is a remarkable shift to the term side. Guaranteed return products are also doing extremely well at a time when interest rates are falling. Unit linked products on the other hands have suffered.