)
According to LIC, products such as Jeevan Tarang, Jeevan Anand, Bima Bachat and Jeevan Saral would be phased out from January 1.
The corporation had already withdrawn 19 products. From January 1, the insurer will launch a portfolio of 15 products — some of which are likely to be modifications of the existing ones.
In the new product regime, the corporation has brought about changes in surrender charges and product structure of traditional policies.
Industry experts said the phase out plan was the main reason for the sharp rise in new premium business in September. In December, too, one can expect a similar jump in the business, as there is a rush to buy the popular products before they are phased out.
Usha Sangwan, the managing director of LIC, had earlier told Business Standard that the state-owned insurer had a 91 per cent market share in terms of number of policies.
“Earlier rules had said the new product regime would be implemented from October onwards, and September was supposed to be the last month in the old regime. In September, we had 100 per cent increase in business, despite volatility in the market. For the quarter ending December 31, we are looking at a 91 per cent market share in new business premium too,” she had said.
Life insurance companies are apprehensive of the customer demand for products from next year. While the new traditional product regime has made the system more transparent, insurers are sceptical about prospective policyholders’ adaptability to the new norms.
Hence, LIC wants to ensure that its business performance does not have any impact in the last quarter, which is usually the most productive quarter in terms of new premiums.
“Almost 60 per cent of LIC's total business comes from the fourth quarter. However, the same ratio may not be seen due to the regulatory changes. But, since traditionally, customers are in a savings mode in the fourth quarter (Q4), we expect business to be robust. The Q4 is demand-driven. We are looking at launching our high-selling products with very little variations,” Sangwan had stated.
According to LIC's website, it has already withdrawn 19 products that include Jeevan Nischay, Market Plus I, Wealth Plus, Jeevan Nidhi, Jeevan Vaibhav (single premium endowment assurance plan), Child Fortune Plus and Jeevan Sugam.
India’s largest insurance company collected new premiums of Rs 37,906 crore for the April-September 2013 period compared with Rs 35,341.53 crore in the year-ago period — growth of 7.25 per cent. The insurance sector collected Rs 50,056.56 crore of new premiums during this period, a rise of 6.5 per cent over the last year.
