Impact of demonetisation on the Indian insurance sector

Even after the passage of two months since the government withdrew high value currency notes from the market, dust is yet to settle down on the issue, with both support and opposition stacked up in equal measure. While some cash-intensive sectors of the industry like real estate and agriculture have been hit hard, some others including insurance seem to have benefited from the immediate aftermath. For record, Prime Minister Narendra Modi, on 8 November, announced that Rs 500 and Rs 1,000 notes were no longer a valid tender, stating the move was targeted to curb terror financing, black money, and counterfeit currency. The story so far According to the monthly numbers of life insurance companies released by IRDAI, the individual single premiums collected in November for all life insurance subscriptions were Rs 6,692 crore. This was a whopping 507% more than what was collected in November 2015. In fact, even on monthly basis, the insurance segment grew by 170% from Rs2,481 crore collected in October. The total amount of first-year premiums (both regular and single premium) grew 113% on a year-on-year basis, and 45% compared to the collections in October 2016, revealed the IRDAI data. The insurance industry, which was growing at a decent 28% on a month-on-month basis, grew more than 40% in November. It was a pleasant surprise for all players in the sector.