Life insurance premium collection declines 14% since April

The busy tax saving season failed to bring cheer to the life insurance market as policy issuance continued to head south, pushing down sales or premium collection by 14 per cent in the current financial year.

While lack of products continued to be one of the key reasons for this fall in collection, the volatile equity market also took its toll. The worst sufferers were the private life insurers, as the number of policies issued by them is down nearly 28 per cent in the current financial year.

Premium collected by writing new policies between April and February nose-dived 19.25 per cent to Rs 24,835.65 crore from Rs 30,756.02 crore a year ago. The number of policies issued by the largest life insurer, Life Insurance Corporation (LIC) of India, too, declined 4.63 per cent in the same period.

As a result, the first year premium collection was down nearly 11 per cent to Rs 64,820.5 crore as against Rs 73,121.61 crore in the corresponding period last year. According to data collected by the Insurance Regulatory and Development Authority (Irda), the life insurance industry collected Rs 89,655.83 crore during this 11-month period by writing new policies.

The general insurance industry continues to clock steady growth as the gross written premium grew 24.03 per cent during 2011-12 against the year-ago period.

In the same period, the life insurance industry sold close to 35.12 million policies, 10 per cent lower than the 39.2 million sold a year ago. For the private players the number of policies issued came down to seven million from 9.7 million.

There is a dearth of new plans in the market — be it pension or Ulips — hence sales are down,” said a private life insurance official.

Source: Business Standard