LIC gains clout as industry premium income surges in Q1

New business premium income of life insurance companies in the first quarter of 2006-07 is more than three times a year earlier, largely because of a spectacular growth witnessed by Life Insurance Corporation (LIC), the leading player.

Fifteen life insurers mobilised a total of Rs 13,736.85 crore as new business premium in April-June 2006, 209 per cent higher than Rs 4,437.44 crore reported a year earlier.

Insurance officials attributed growth in new business premium to the hard selling of liberal unit-linked insurance plans (ULIPs) which were phased out on June 30, 2006. The new ULIPs sold from July 1, 2006, have a lock-in period of five years against the three years earlier and the premium allocated is also higher.

LIC, the public sector behemoth, earned new business premium with Rs 10,787.57 crore in April-June 2006, 225 per cent more than Rs 3,322.35 crore registered a year earlier. On their part, the 14 private sector life insurers earned the new business premium of Rs 2,949.28 crore in the first quarter of 2006-07, 164.48 per cent higher than previous year's Rs 1,115.09 crore.

While market share of the private players in new business premium is 21 per cent, LIC's share stands at 79 per cent.

Bajaj Allianz reported a three-fold jump in new business premium at Rs 623 crore for the first quarter of the financial year 2006-07 compared with Rs 185 crore in 2005-06, showing 236 per cent growth. The company added 150 new offices in quarter under reference.

ICICI Prudential Life Insurance's new business premium income jumped five times to Rs 6,450 crore from Rs 1,286 crore a year earlier.