Life insurers total assets up 17% in FY15; new premium down

Despite fall in the new premium during 2014-15, the total assets of the Indian life insurance industry went up by almost 17 per cent to Rs 23.44 lakh crore in the last financial year.
The life insurance sector, consisting of 24 companies led by state-owned LIC, had seen its total new premium fall by 6 per cent to Rs 1,13,140 crore in 2014-15 from Rs 1,20,162 crore in 2013-14.
The total investment made by these firms in the previous fiscal stood at Rs 22.45 lakh crore.
"There is a difference of merely Rs 1 lakh crore between the total assets and total investment of the industry which shows that the life insurers have invested 96 per cent of premium from customers in sound financial instruments," Life Insurance Council Secretary General V Manickam told PTI.

Providing a break-up of investments in 2014-15, he said "out of the total investment, 38 per cent went in central government securities, while 23 per cent was parked in state government securities.
"Thus, investment in central and state government securities put together stood at 61 per cent, while 10 per cent went in infrastructure."

"The balance 29 per cent has been invested in bonds, equities, debentures and other financial instruments," he said, adding "the life insurers made a fresh investment of Rs 2.90 lakh crore in 2014-15."
"Moreover, out of Rs 3.28 lakh crore of total premium income in FY15, life insurers have invested Rs 2.15 lakh crore from renewal premium in financial instruments against the investment of Rs 1.13 lakh crore from new business premium in FY15. This means the contribution of renewable premium is apparently much more than that of new business premium in the investment made by the life insurers in FY15," Manickam said.

"Out of Rs 22.45 lakh crore investments in 2014-15, Rs 3.6 lakh crore has been invested from Ulip products in the capital market instrument, slightly up from Rs 3.3 lakh crore invested in 2013-14. Similarly, Rs 18.85 lakh crore has been invested from non-Ulip products in 2014-15," he said.
The number of branches of life insurance companies almost remained flat at 11,030 in FY15, indicating the insurers are not expanding their reach through this route.
The number of agents has fallen by 6 per cent during 2014-15 to around 20,68,000. The life insurance industry employs 2.5 lakh people as of March-end.