The Indian life insurance industry is expected to contract in 2020, declining by 0.9% in 2020 as compared to 8.8% growth recorded in 2019, according to GlobalData, a leading data and analytics company.
GlobalData has revised India’s insurance forecast in the aftermath of the global coronavirus (COVID-19) outbreak. As per the latest data, India’s life insurance market is forecasted to grow at a compound annual growth rate (CAGR) of 5.3% during the forecast period 2019-2023.
Pratyusha Mekala, Insurance Analyst at GlobalData, comments: “Bancassurance and agency channels account for over 90% insurers’ new business premiums in India. Due to the lockdown restrictions, sales through these channels have been severely impaired.”
The extended phase of lockdown and its related restrictions will have a negative impact on the new business premiums growth in 2020. As a result of lockdown, life insurers reported decline of 32.6% in new business premium in April 2020 against the same period last year. State-owned market leader Life Insurance Corporation of India registered a decline of 32% in premium from new business while private life insurers have seen decline of 33.3% during the same period.
Mekala concludes: “To offset the adverse impact of offline distribution channels, efforts are being made by insurance companies to accelerate online sales. For instance, Web aggregators such as Policybazaar have reported 20% growth in sales of life insurance products in March 2020. However, growth from online channels is unlikely to prevent contraction in the overall life insurance business.”