Page 12 - Insurance Times November 2021

reported a 46.6 per cent jump in its net While Munich Re has tightened the surprising 24% CAGR and then
profit for the second quarter of the screws on underwriting, GIC Re hiked followed with an anaemic 8% CAGR in
fiscal, aided by robust growth in rates earlier this year. the next 10 years. However, Emkay
premium income. "GIC, hiked rates in March and they Global is now more confident of
growth in the future due to a number
For the quarter-ended September 30, came into effect from April. While till
of underlying factors.
2021, the private sector life insurer now we have not passed on the
posted a net profit of Rs. 444.57 crore increased rates to customers, now we India has one of the highest and
as against a net profit of Rs. 303.22 feel the need to raise the tariff on fastest growing Mortality protection
crore in the same period last fiscal. term plans taking into consideration and Retirement funding gaps in the
Net premium income increased by our profitability. We will be increasing world. India's mortality protection gap
8.33 per cent to Rs. 9,286.53 crore in our rates on the term side this stands at $16.5tn and is compounding
calendar year in the range of 1520 per at ~7% over 2020-30E, but accounts
the second quarter of the fiscal from
cent, depending on age, sum assured for only 83% of what is needed.
Rs. 8,572.19 crore a year ago.
and quality of life of the individual,"
Net income from investments surged said Rushabh Gandhi, Deputy CEO, Insurers seek a hike in
by 70.4 per cent on a year-on-year IndiaFirst Life Insurance.
basis to Rs. 13,545.83 crore in the July- PMJJBY premium
September 2021 quarter. Vighnesh Shahane, MD and CEO, Life insurance companies have pitched
Ageas Federal Life Insurance, pointed for a re-pricing of the government's
out that over the last 18 months of the
Life insurers see 22% new flagship Pradhan Mantri Jeevan Jyoti
pandemic, and especially during the Beema Yojana.
biz premium growth in second wave, re-insurers were badly According to calculations, the premium

September hit by the surge in claims, and there would have to be fixed at a little over
has been a lot of pressure on them to
Life insurers showed impressive growth hike rates. Rs. 400 per annum per policy from the
in new business premiums (NBP) in current Rs. 330.
September over the same period last "We estimate that term plan prices are Launched in 2015, the PMJJBY scheme
year. The NBP of life companies was up likely to rise by 20-40 per cent across provides a life cover of Rs. 2 lakh to
more than 22 per cent year-on-year the board. However, the exact rise will people in the age group of 18 to 50
(YoY) in September to Rs 31,001 crore. vary from company to company, and
from re-insurer to re-insurer. It will also years (life cover up to age 55) having
While private insurers, 23 in total, saw depend on the Claims were up 2-3 a savings bank account. The scheme is
their NBP go up more than 42 per available for a one year period
times over the first wave amount of
cent, state-owned insurance business the company does with the re- stretching from June 1 to May 31 and
behemoth Life Insurance Corporation insurer," he said. is renewable every year.
(LIC) saw a 12 per cent rise. The top The government had chosen to keep
three private insurers--SBI Life, HDFC the premium rate low in order to
Life, and ICICI Prudential Life - Life insurance companies enable more people to take life cover
recorded NBP growth of 30.5 per cent, to see 15% growth and get social security.
37.5 per cent, and 20.8 percent, Emkay Global Financial Services has
respectively, in the same period. NBP come up with a report on the growth However, insurers point out that the
is the premium acquired from new prospects for the life insurance premium for the life insurance cover
policies in a particular year. companies in the listed space. The was fixed a long time ago and needs
to be reviewed. Further, there has also
analysis period is from 2020-2030.
Term insurance premiums been a rise in claims under the scheme
The favourable underlying demand following the Covid-19 pandemic.
to rise up to 40% as re- factors for life insurance will lead to an "It is very, very important that the

insurers push up rates overall premiums growth of 15% premiums for the scheme increase. It
annually for the next decade, leading
Term insurance premium rates are set has not been hiked even once sincethe
to rise by up to 40 per cent after re- to 4x increase in total life insurance scheme was launched. It is not
insurers tightened underwriting norms premiums to Rs. 24 lakh crore by FY31. sustainable at the moment," said an
in the wake of Covid-19. In FY01-11, premiums had grown at a official with a life insurance company.

12 The Insurance Times, November 2021