Hit hard by the coronavirus pandemic, the life insurance sector witnessed an 18.6 per cent drop in the first year premium to Rs 49,335 crore in the April-June quarter of the current financial year, according to a report by CARE Ratings. The overall sum assured also declined 12.9 per cent to Rs 8.8 lakh crore in the June 2020 quarter, compared with Rs 10 lakh crore (which was an increase of 17.6 per cent) in the corresponding period of the previous year.The sector had seen their first-year premium declines of 32.6 per cent and 27.9 per cent in April 2020 and May 2020, respectively, the report said adding that the June 2020 quarter figures are indicative that the sector is moving towards recovery. “The life insurance sector continues to report a drop in their first-year premium collection as businesses have been severely impacted by the COVID-19 pandemic. The sector reported a decrease of 18.6 per cent in the first-year premium to Rs 49,335 crore in Q1FY21 from Rs 60,637 crore in Q1FY20,” it said.Attributing the decline in business in the first quarter of the current fiscal to lockdown and business disruption, the report said, “Growth could potentially return in the second or third quarter of 2020-21. Distribution channels could see significant realignment, with digital rising at the cost of individual agents/ bancassurance.”

(Economic Times)