The premium income of life insurance companies declined by 21% in the first 6 months of the 2011-12 fiscal on account of a lower number of products hitting the market.
The total gross premium of the 23 players in the life insurance market declined by 21% to Rs 49,046 crore in the April-September period of the current fiscal, as per Insurance Regulatory and Development Authority (Irda) data.
The figure stood at Rs 62,361 crore in the April-September of 2010.
The country's largest insurer LIC, which enjoys a 75% share of the total life insurance market, saw its premium income dip to Rs 36,721.4 crore in the six-month period.
This was 20% lower than the Rs 45,691 crore premium LIC earned in the corresponding period last year.
Experts said life insurance players are not coming out with new products and hence, the new business premium income of these companies is declining. A lower number of unit-linked products (Ulips) in their product basket is also reducing their policyholder base, they said.
Private players also witnessed a 26% decline in premium income to Rs 12,325 crore during the six-month period ended September 30.
Industry players said the second half of this fiscal would be comparatively better, as the new guidelines on pension products would help increase sales of regular premium unit-linked pension products.
Yesterday, insurance regulator Irda asked all insurers selling pension products to disclose maturity benefits in the policy documents.
The new guidelines replace the earlier requirement of providing a minimum guaranteed return of 4.5% on all pension products, which did not find favour with life insurers.
On the other hand, the non-life insurance industry witnessed a 26% increase in gross premium collections during the April-September period to over Rs 28,600 crore.
The four PSU general insurers -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance -- witnessed a 25% increase in premium collections during the period.