New business premiums of life insurers rose to 7.5% in FY21

Indian life insurance industry capped FY21 with a 7.5% increase in new business premiums (NBP) to Rs. 2,78,277.98 crore compared with Rs. 2,58,896.48 crore in FY20. The industry ended the year with a 3% growth rate in retail annualized premium equivalent (APE) of Rs. 75,658.06 crore.

Snehil Gambhir, partner and director, Boston Consulting Group, remarked, “As expected, March was a big month for the industry, adding a significant push to finish a year that was nothing short of tumultuous. March, 2021 began with the industry flat to LY (low yield) in NBP terms but down almost 8% on APE terms, led by LIC’s APE being down over 15% to last year. But a strong finish by LIC helped push the industry into positive territory even in APE terms.”

While post lockdown saw Banca-led players face severe headwinds, the larger players have turned things around considerably. Gambhir stated, “HDFC Life and Max Life have been recording improvements month-on-month and have posted healthy 17%+ and 19%+ growth in retail premiums respectively on an APE basis for the year. TATA AIA is the only insurer in the Top 10 that has recorded positive growth each month with an impressive ~27% growth in retail APE premium. Among agency-led players, Bajaj Allianz has also had a stellar year clocking ~28% retail APE growth. The other top performers among the larger players were Aditya Birla SunLife with ~14% growth and Kotak Life with about 11%. After a slow start in the year, behemoth SBI Life, finished the year with a 4% growth in APE, ending the year again as the leader in the private industry with FY21 Retail APE of over Rs. 10,200 crore and total new business premiums across group and retail of Rs. 20,625 crore. State-owned LIC clocked retail APE of over Rs30,466 crore.”