Life insurance companies have witnessed a 70 per cent jump in new premium collection during the first five months of the financial year. The increase comes in a period that saw the insurers trying to push sales ahead of the change in norms for unit-linked insurance plans (Ulips).
According to data released by the Insurance Regulatory and Development Authority (Irda), insurance companies garnered Rs 52,749 crore in new business premium in the April-August period, against Rs 31,040 crore in the corresponding period last year.
Insurers had anticipated an adverse effect of the change in norms, as the lock-in period had been increased from three years to five years. They had increased their sales target for the year to August. Most companies were selling their pension plans.
State-owned LIC gained the most, with an increase of 88 per cent in new business premium income. Its market share increased to 79 per cent in the month to August.
At the same time, private sector insurance recorded a 34 per cent increase in income from sales of new policies. New business income collected by ICICI Prudential stood at Rs 2,591 crore during April-August. SBI Life remained in the third position after registering a 40 per cent increase in new sales to Rs 2,390 crore from Rs 1,704 crore in April-August 2009. HDFC Standard Life saw a robust 54 per cent increase in new business.
“The industry will record a 20 per cent increase in new business premium. There will be a knee-jerk reaction to the revised norms, but we expect sales to pick up after a couple of months.” LIC Chairman T S Vijayan said.
Insurance companies have revised their products to comply with the new norms. While insurers have floated pension and child plans on the traditional platform, they have stayed away from unit-linked pension plans. However, LIC is the only insurer to have launched a pension plan called Pension Plus.
