It hasn’t been a good start to the financial year for the life insurance sector. After witnessing a drop of over 30 percent in total premium collection in the month of April, now the damage seems to be continuing with no signs of recovery.

As per the latest data from the Life Insurance Council’s website, the life insurance sector’s premium collection in the month of May saw a decline of over 25 percent. The private life insurance sector’s premium collection in May also dropped by over 28 percent.

HDFC Life Insurance saw its premium collection in May dropping by almost 47 percent which came in at Rs 637 crore. Annual Premium Equivalent (APE) for the insurer also dropped by 33 percent in the month of May on a year on year basis. To see whether there was any recovery in premium collection over the previous month (April) we also compared the two months. As per the data published, HDFC Life collected Rs 668.9 crore in April 2020 whereas the figure stood at Ra 637.6 crore in May 2020 indicating no significant recovery.

ICICI Prudential Life Insurance’s total premium collection fell by 2.3 percent and its APE in the month if May saw a sharp drop of 52 percent. The insurer collected a premium of Rs 256 crore in the month of April compared to Rs 678 crore collected in the month of May 2020.

Max Life Insurance’s total premium collection in the month of May dropped by 42 percent where as its APE in the same month also dropped by 19.5 percent. The insurer collected a premium of Rs 172 crore in the month of April compared to Rs 233 crore collected in the month of May 2020.

SBI Life Insurance saw its total premium collection in the month if May declining by over 31 percent and its APE declining by almost 46 percent in the same period. The insurer collected a premium of Rs 917 crore in the month of April compared to Rs 638 crore collected in the month of May 2020.

Life Insurance Corporation of India recorded a drop in the premium collection by 26 percent though the damage on APE front remained restricted at around 3 percent.

The drop in the premium collection for the life insurance sector is mostly attributed to the disruptions in the distribution channels including agency force and bancassurance which did not perform during the lockdown period.

First Published:Jun 9, 2020 5:47 PM IST