Life insurance premium mop-up declines 28%

The slide in premium collection by life insurance companies continued in June. Led by a 29 per cent fall in premium collection by Life Insurance Corporation (LIC), first-year premium collections by life insurance companies fell 28.36 per cent in the April-June period, compared to the corresponding period last year.

Premium collections were down 12 per cent during the April-May period.

According to data collected by the Insurance Regulatory and Development Authority (Irda), during the first quarter of the financial year, 23 life insurers collected Rs 18,282.86 crore by writing new policies, compared with Rs 25,522.21 crore collected a year ago.

LIC, the country’s largest life insurer, collected premiums worth Rs 13,341.97 crore, compared with Rs 18,740.42 crore in the year-ago period, while collections by its private peers fell 27.14 per cent from Rs 6,781.79 crore to Rs 4,940.89 crore. In June, the industry collection dropped 16.23 per cent to Rs 6,022.98 crore, against Rs 7,190.07 crore in May.

In 2010-11, the life insurance industry had collected Rs 1,25,826.03 crore by selling new policies, a rise of 15.13 per cent compared with Rs 1,09,290.38 crore collected in the corresponding period a year ago. This was the lowest growth rate since 2002, when industry sales were down 14 per cent.

GENERAL INSURER GROW 22%
The gross written premium of the general insurance industry rose 22.35 per cent during the first quarter of 2011-12, compared with the year-ago period. According to data collected by insurers, the industry collected Rs 14,045.87 crore by writing new policies in the April-May period, compared with Rs 11479.64 crore collected last year.

While, private insurers registered a growth of 27.40 per cent at Rs 6,020.09 crore, the four state-owned general insurance companies’ collection rose 18.82 per cent to Rs 8,025.78 crore. During May, the industry recorded a growth of 23.15 per cent by writing new policies at Rs 4,425.09 crore, compared with Rs 3,593.06 crore in year-ago period. Government-owned New India Assurance India Ltd collected Rs 2,316.12 crore by writing new policies so far this financial year.