Are People Buying More Life and Health Insurance Policies After Covid-19? Know Here – News18
After a muted show in December 2021 and January 2022 due to the third wave of the COVID-19 pandemic, life insurance companies reported impressive growth of 22.47 per cent in new business premium (NBP) to Rs 27,464 crore in February, according to a report by SBI Research. “NBP of life insurers rose 22.47 per cent (y-o-y) to Rs 27,464.76 crore in February, with LIC’s NBP recording a jump of 35.4 per cent to Rs 17,849.34 crore, and private insurers reporting a growth 5 per cent to Rs 9,975 crore,” the report, titled ‘Ecowrap’, said.
It said life insurance was affected during FY21 and FY22 due to the COVID-19-led pandemic, which had restricted the movement, as the insurance business is mostly based on the performance of the agents. The report said the growth in February was mainly driven by IPO-bound LIC’s sharp jump in NBP in the same period, fuelled by 40 per cent growth in group single premiums.
Women Participation
In a positive trend, women’s participation in financial inclusion has improved, according to the report. “In 19 states/ UTs, the share in the number of policies bought by women to the total policies sold is higher than the all-India average of 33 per cent.” The number of policies issued to women in FY21 stood at around 93 lakh policies, which is 33 per cent share as against a share of 32.23 per cent in 2019-20. The proportion of policies on women in the case of private life insurers is 27 per cent and that of LIC is 35 per cent.
Death Claims
Death claims paid by the life insurance industry has increased by 40.8 per cent to Rs 41,958 crore in FY21. In the case of the individual life insurance business, during FY21, the life insurers paid 10.84 lakh claims, with a total benefit amount of Rs 26,422 crore (46.4 per cent growth). The ticket size of the death claims increased to Rs 2.44 lakh in FY21, compared with Rs 2.13 lakh in FY20. The rise in death claims seems due to the increased deaths during COVID-19.
Digital Selling
The report said that despite digitalisation, the share of policies sold through online and web aggregators stands at just 1.9 per cent in terms of premium value and around 1.6 per cent in terms of the number of policies.’ The growing channel is ‘Bancassurance’, in which the share in premium collections has increased to 29 per cent in FY21 from 16.6 per cent in FY14.
In the case of private insurers, the share of Bancassurance is around 55 per cent, while LIC depends mostly on ‘individual agents’. The individual agent share has been declining and is at 58 per cent at the overall industry level in terms of life insurers, including 23 per cent for private and 94 per cent for LIC.
Insurance Penetration
The insurance penetration in India has increased from 2.71 per cent in FY01 to 5.20 per cent in FY09 due to liberalisation but thereafter, the level of penetration was declining and reached 3.30 per cent in FY14. However, with significant government support and universal insurance schemes like PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) and PMSBY (Pradhan Mantri Suraksha Bima Yojana), the insurance penetration has started increasing again from FY15 and is at 4.20 per cent in FY21.
The report, authored by SBI group chief economic advisor Soumya Kanti Ghosh, said the growth in February was mainly driven by IPO-bound LIC’s sharp jump in NBP in the same period, fuelled by 40 per cent growth in group single premiums.
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