In the first half of the financial year 2019-20 (April-September 2019, or H1FY20), life insurance companies saw a growth of 35 per cent in new business premium collections. While the collections grew 41 per cent for state-owned insurance behemoth Life Insurance Corporation of India (LIC), private insurers clocked a 20.88 per cent growth.
In absolute terms, the life insurance industry earned new business premiums to the tune of Rs 1.25 trillion in H1FY20, compared to Rs 93,078 crore in the same period a year ago. Of this, LIC alone amassed Rs 89,980 crore while private insurers accumulated new business premiums of Rs 35,777 crore.
New business premium is the premium acquired from new policies in a particular time period. However, the growth for September was not as impressive as it is for the combined numbers of the first two quarters.
In September, the segment saw a 14 per cent growth with LIC premiums growing at 18 per cent and private insurers premiums growing at 8 per cent.
In Annualised Premium Equivalent (APE) terms, which is estimated by taking the value of regular premiums and adding 10 per cent of single premiums underwritten during that period, the private players grew 3.8 per cent year-on-year (yoy) in September indicating that the slowdown in the economy might have impacted the performance of private players, said a research report by Emkay Global Financial Services.
“Growth of private players was very tepid in September 2019 due to the impact of the current economic slowdown finally hurting the insurance sector with a lag,” the research report read.
“Retail APE for private players grew 2.5 per cent yoy, while it contracted by 2.8 per cent yoy for the industry as LIC’s retail APE growth contracted by 10.6 per cent yoy,” the report said.