Life insurers' new biz premium dips 20%

The new business premium income of the life insurance industry fell by 20 per cent in December compared to the year before.

According to data collated by insurers, the industry collected Rs 9,709 crore by selling new policies in December, as against Rs 12,201 crore last year. However, the new business income rose from November, when the industry collected Rs 7,282 crore.

Since the past few months, insurers have been facing the challenge of growing their top line while maintaining the bottom line. Product training has also killed much of their time.

State-owned Life Insurance Corporation (LIC) of India reported a decline of 19.72 per cent in new business income while most private players saw their new premium income falling by 20-30 per cent. The private sector saw a dip of 22 per cent in December.

SBI Life pipped ICICI Prudential Life to become the largest private life insurer in terms of new business premium income.

It reported fall of 11 per cent in new business in December, while ICICI Prudential recorded 25 per cent drop in income from the sale of new policies. HDFC Life was the only insurer to report an increase in new business income.

Of late, insurers have increased their focus on renewal premium. They find it easier to service renewal policies as there is no acquisition cost attached.

For the nine months ended December, the industry recorded growth of 28.33 per cent in new business premium income.

Most of it happened in the first five-six months. Sales have taken a hit after new norms were introduced in September.

“Income in December has been better than November. Now, we expect January to be better than December. It would not be fair to compare this year’s sales to the year before as the regulatory environment has changed,” said IDBI Federal Life Insurance MD and CEO G V Nageswara Rao.