According to Kotak Institutional Equities, APE (Annualised Premium Equivalent) for private players decreased at 7% in July, and APE for Life Insurance Corporation of India (LIC) increased up to 10% year-on-year.
Despite new business premiums (NBP) witnessing a growth of around 7% in July at Rs 22,986.10 crore compared to Rs 21,509.25 crore in July of previous fiscal year, individual non-single plans have continued to see fall in premiums. New sales have taken a hit as investors have deferred their investments in insurance due to the uncertainty, says industry officials.
APE is the total of annualized first-year premiums on regular premium policies, and 10% of single premiums, written by insurance companies during any period from both retail and group policyholders. Data from the Insurance Regulatory and Development Authority of India on the last financial year show that individual non-single premiums for July stood at Rs 5,368.49 crore as against Rs 5,557.99 crore, a drop of 3.41%.
Even for the first three months of the financial year, individual non-single segment growth has been negative.”Individual businesses had a loss because investors are not able to meet the distributors due to the social distancing norms, and another reason for an individual business not picking up is because people are not sure about their financial situation due to the job losses. Before committing to long term plans investors want to be sure of their financial situation.” Says Vighnesh Shahane, MD & CEO at IDBI Federal Life Insurance.
For the life insurance industry had strong growth in July Private life insurers noticed the NBP for individual single premium at Rs 1,136.19 crore, a growth of 50.02% against the same period of last year. LIC saw its NBP for individual single premium up by 68.59% at Rs 3,305.95 crore in July compared to Rs 1960.99 crore in July 2019.
