Life insurance industry sees 7.5% rise in 1st year premium

According to the data revealed by IRDAI, despite the second wave of COVID-19, the first-year premium (FYP) of life insurance players rose by 7.5% in 2020-21 at Rs. 2.78 lakh crore as against Rs. 2.58 lakh crore in the year-ago period. In FY20, FYP had increased by 21% at Rs. 2.58 crore as compared to Rs. 2.14 lakh crore in FY19. CARE Ratings, in its sectoral analysis, pointed out that despite the manifold challenges in the current scenario, the life industry ended FY21 on a positive note.

It stated, “The growth was driven by the private sector, which grew at a much faster pace compared to the public sector. The single premium policies have driven growth in FY21.” It also pointed out that the pandemic has boosted the demand for protection plans, even as the market volatility continued to affect the demand for market-linked plans.

LIC, which accounted for nearly 66% share of the total FYP secured by insurers, reported 3.48% growth in FYP for financial year 2021. LIC’s first-year premium increased to Rs. 1.84 lakh crore in FY21 as against Rs. 1.78 lakh crore in the year ago period.