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New business premiums of life insurance companies saw a 4.07 per cent drop for the April-May period, compared with the year-ago period. Life insurers collected new premiums of Rs 11,742.7 crore for the two-month period; the figure was Rs 12,428.8 crore in April and May 2012.
Life Insurance Corporation of India (LIC) collected total new premiums of Rs 8,782.2 crore, compared to Rs 9,214.7 crore in same period in FY13. Private life insurers saw a 7.8 per cent drop in new premium collections at Rs 2,960.6 crore.
These insurers started the new financial year, FY14, with a marginal rise in new business premiums.
However, the numbers dropped in the consequent period. The life insurance industry ended FY13 with a decline of 6.3 per cent in new business premiums.
According to data from the Insurance Regulatory and Development Authority (Irda), life insurers collected Rs 1,07,010.7 crore worth of new premiums for the financial year ended March 31, compared to Rs 1,14,232.7 crore collected in the year-ago period.
The drop in new business premiums was due to slowdown in economy, resulting in lower disposable income for potential customers who would have purchased policies.
However, with change in regulatory guidelines and expectations of higher economic growth, insurers believe they would be able to achieve better numbers in the current financial year.
