The life insurance industry recorded a 45 per cent growth in new business premium income collected in the months of April and May. The growth came even as insurers pushed sales of unit-linked insurance plans (Ulips) and pension plans, anticipating a fall in sales of these products after the new norms kick in.
According to data released by the Insurance Regulatory & Development Authority (Irda), new business premium income collected by the life insurance industry stood at Rs 65,528 crore during April-May this year, as against Rs 45,170 crore in the same period last year.
Life Insurance Corporation (LIC), the state-owned insurer, almost doubled its new premium, registering an increase of 88.29 per cent at Rs 10,082 crore in April-May from Rs 5,354 crore in the corresponding period last year. At the same time, private players recorded 16 per cent growth in income from new sales.
What helped LIC is its Wealth Plus product — a unit-linked plan guaranteeing the highest net asset value over seven years. The policy, which closed on May 8, saw the highest inflow in any insurance product — around Rs 11,000 crore. Last year, the largest insurer had collected around Rs 10,000 crore from its guaranteed insurance plan, Jeevan Astha.
New business income collected by ICICI Prudential stood at Rs 763.64 crore during the period under review. SBI Life remained in the third position after registering a 20 per cent decline in new sales at Rs 627.89 crore from Rs 783.94 crore in April-May 2009. HDFC Standard Life, which had increased its market share over the last few months, saw a robust 71.5 per cent increase in new business. In April, after the regulatory war over Ulips broke, insurance executives complained about a fall in sales. “Many people had deferred their plans to buy insurance as there was uncertainty over regulations for Ulips,” said a senior executive of a life insurance company.
“We have asked our agents to push Market Plus before the norms change,” said D K Mehrotra, managing director, LIC. Market Plus is a unit-linked pension plan. Similarly, other insurers have also been promoting Ulips in the last two months. “Pension plans would become expensive after the guaranteed returns are offered compulsorily. So, we are pushing these products,” said a senior executive of another life insurance company.
