Insurance policies

Are people buying more life and health insurance policies after Covid-19? Find out here

After a muted show in December 2021 and January 2022 due to the third wave of the COVID-19 pandemic, life insurance companies reported an impressive 22.47% growth in new business premiums (NBP) at Rs 27,464 crore in February, according to a report by SBI Research. “The NBP of life insurers increased by 22.47% (year-on-year) to reach Rs 27,464.76 crore in February, with LIC’s NBP recording a jump of 35.4% to Rs 17,849.34 crore. rupees and private insurers reporting growth of 5% to 9,975 crore rupees,” the report, titled “Ecowrap,” said.

He said life insurance was affected in FY21 and FY22 due to the pandemic caused by COVID-19 which restricted movement as the insurance business is mainly performance based. agents. The report says growth in February was primarily driven by LIC’s strong IPO-related NBP increase over the same period, fueled by 40% growth in group unique premiums.

Participation of women

In a positive trend, women’s participation in financial inclusion has improved, according to the report. “In 19 states/UT, the share of number of policies purchased by women out of total policies sold is above the all-India average of 33%.” The number of policies issued to women in FY21 stood at around 93 lakh by 33% compared to 32.23% in 2019-20. The proportion of policies on women in the case of private life insurers is 27% and that of LICs is 35%.

Death claims

Death claims paid by the life insurance business increased by 40.8% to Rs 41,958 crore in FY21. In the case of the life insurance business Individually, in FY21, life insurers paid 10.84 lakh in claims, with a total claim amount of Rs 26,422 crore (46.4% growth). The death claims ticket amount increased to Rs 2.44 lakh in FY21 from Rs 2.13 lakh in FY20. The rise in death claims appears to be due to the increase in deaths during COVID-19.

Digital sale

The report says that despite digitization, the share of policies sold via online and web aggregators amounts to just 1.9% in terms of premium value and around 1.6% in terms of number of policies. The growing channel is Bancassurance, where the share of premium recoveries increased from 16.6% in FY14 to 29% in FY21.

In the case of private insurers, Bancassurance’s share is around 55%, while LIC depends mainly on “individual agents”. The share of individual agents has decreased and stands at 58% at the overall sector level in terms of life insurers, including 23% for private and 94% for LICs.

Insurance penetration

Insurance penetration in India decreased from 2.71% in FY01 to 5.20% in FY09 due to liberalization but thereafter the level of penetration has declined and reached 3.30% in FY14. However, with strong government support and universal insurance schemes like PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) and PMSBY (Pradhan Mantri Suraksha Bima Yojana), Insurance penetration started to increase again from FY 2015 and stands at 4.20% in 2021.

The report, authored by SBI Group’s Chief Economic Advisor, Soumya Kanti Ghosh, said the growth in February was mainly due to LIC’s strong NBP increase related to the IPO over the same period. fueled by a 40% growth in the group’s single premiums.

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