24 life insurers in India have largely seen impressive growth in New Business Premium (NBP) in March, 2021 and ended the financial year on a high, defying expectations of many who were under the impression that the life sector may see a de-growth in FY21.
In March, 2021, the NBP of life insurers grew by 70% to Rs. 43,416.69 crore from Rs. 25,409.30 crore a year ago. The unusual rise in may also be attributed to the fact that last year in March the COVID-19 pandemic had struck, resulting in a stringent lockdown, and the life insurers had lost a fortnight of their most productive time.
In March, 2020, the NBP of life insurance companies had declined 32%, owing to the disruption caused by the spread of the Corona Virus and the subsequent lockdown enforced by the government to contain its spread.
In FY21, the NBP of life insurers rose 7.5% to Rs. 2.78 trillion compared to Rs. 2.58 trillion in FY20. In the last fiscal year, life insurers saw NBP grow 20.6% to Rs. 2.58 trillion compared to Rs. 2.14 trillion in FY19.
Care Ratings stated, “Despite the manifold challenges present in the current scenario, the life industry ended FY21 on a positive note. The growth was driven by the private sector who grew at a much faster pace compared to the public sector. The single premium policies have driven growth in FY21. The pandemic has created a rise in the demand for protection plans, even as the market volatility continued to affect the demand for linked plans. The life insurance premiums have been all over the place, with monthly premiums increasing and retreating due to the lockdown and business disruption. In FY22, along with the increased awareness of insurance, a digital push for insurance and an increase in term plan premiums could drive the life premiums.”