The lack of pension and unit-linked insurance products (Ulips) continues to take a toll on the life insurance industry, particularly on private players. The number of policies issued by these players has declined 29 per cent so far this financial year. Consequently, the busy season notwithstanding, premium collection by the life insurance industry declined in the April-January period.
During this period, the industry collected Rs 81,496.68 crore by writing new policies, down 14.21 per cent from Rs 95,000 crore collected in the same period a year earlier.
The number of policies issued by Life Insurance Corporation (LIC) of India, the largest life insurer, also fell five per cent in the same period. As a result, the company’s first-year premium collection declined nearly 12 per cent to Rs 59,145.36 crore, compared with Rs 67,135.31 crore in the corresponding period of the previous financial year.
According to data collected by the Insurance Regulatory and Development Authority (Irda), so far this financial year, the life insurance industry sold 31.15 million policies, a fall of 11.12 per cent from the 35.05 million policies sold in the year-ago period. For private players, the number of policies issued declined from 8.84 million to 6.27 million. “There is a dearth of new plans in the market, be it pension plans or Ulips. Hence, sales are down,” said an official of a life insurance company.
K Sahay, chief executive, Star Union Dai-ichi Life, one of the few companies to record premium growth, said, “With the commissions on unit-linked plans coming down, many agents have left the industry. This has impacted the sales of private life insurance companies.” This financial year, the company recorded a 52 per cent rise in first year-premium collection, which stood at Rs 674.17 crore.
During the April-January period, premium collection by private life insurance companies fell almost 20 per cent to Rs 22,351.32 crore.
General insurers grow 24%
The general insurance industry’s gross written premium grew 24.13 per cent so far this financial year, compared to the year-ago period.
According to data collected by insurers, the general insurance industry collected premiums worth Rs 47,215.29 crore by writing new policies during the April-January period, compared with Rs 38,036.26 crore in the corresponding period of the previous year.
While private insurers recorded growth of 25.74 per cent at Rs 19,839.39 crore, collection by the four state-owned general insurance companies rose 23 per cent to Rs 27,375.90 crore.
I am 45, and plan to retire by 55. I already have two pension plans.