Mumbai: A steep rise in death claims during the second wave of the Covid 19 pandemic has hit life insurers profitability. However, rising awareness and importance about insurance has helped sales of individual new policies. Of the three listed private life insurers-SBI Life Insurance and HDFC Life Insurance reported lower profits for the June quarter while ICICI Prudential Life Insurance reported a loss.
On Monday, SBI Life reported a 43 per cent slump in its net profit to Rs 220 crore for the quarter ended in June 2021, it was hit by higher claim payouts due to Covid. The insurer had posted a net profit of Rs 390 crore in the year-ago quarter. The number of claims reported in the first quarter of 2021-22 are 1.28 times of that filed in the whole FY21, SBI Life said. The total number of Covid claims in Q1 FY22 stood at 8,956 and the Covid-19 claims, as net of reinsurance, stood at Rs 570 crore. Individual new business premium jumped by 37 per cent to Rs 184 crore, as against Rs 134 crore.
Similarly, HDFC Life reported a 33 per cent year-on-year fall in net profit for the quarter ended June to Rs 302 crore as the company raised reserves for claims expected in second and third quarter. HDFC Life said that its claims soared three-to-four times during the June quarter as against the peak claims volumes in the first wave of the Covid-19 pandemic. It paid over 70,000 claims in the first quarter of the current financial year with gross and net claims amounting to Rs 1,598 crore and Rs 956 crore, respectively. It has set up an additional reserve of Rs 700 crore to service the claims intimations expected to be received in Q2 and Q3.
The largest private life insurer ICICI Prudential Life Insurance reported a net loss of Rs 186 crore for the June 2021-22 quarter on account of higher Covid related provisions and death claims settlement. The insurer had reported a net profit of Rs 288 crore last year. It settled Rs 1,119 crore of COVID-19 claims in Q1FY22. It has created provisions of Rs 498 crore towards future COVID-19 claims.
