First-year premium collection of life insurance companies in India has witnessed a fall of 6.7 per cent in October, led by 11 per cent decline in new premium income of the country’s largest insurer, Life Insurance Corporation of India.
According to the latest data released by the Insurance Regulatory and Development Authority, LIC collected Rs 2,782 crore in October, compared with Rs 3,139 crore a year ago.
Private sector insurers saw a 0.44 per cent fall in first year premium collection, at Rs 2,300 crore. LIC garnered 57.5 per cent of first year premium income in October. For the seven-month period until October, LIC’s first year premium income dipped 15.5 per cent at Rs 21,870 crore. LIC targets 30 per cent growth in premium income in 2008-09. Its new premium collection was 580 bln rupees in 2007-08.
T S Vijayan, chairman, LIC, On Monday said the corporation is not revising its target for the current financial year, despite experiencing negative growth in first year premium income.
Vijayan has attributed the fall in sales of unit-linked products to the decline in premium income growth.
“While new premium from non-linked products has increased by 40 per cent (till November), there was an equal decline from unit-linked plans,” Vijayan said.
| MIXED FORTUNES First-year premium of life insurers for Apr-Oct | |||
| Company | 2007 | 2008 | %chg |
| LIC | 25,901 | 21,874 | -18.40 |
| ICICI Prudential | 3,183 | 3,870 | 21.58 |
| Bajaj Allianz | 2,650 | 2,361 | -12.25 |
| SBI Life | 1,472 | 2,731 | 85.57 |
| Reliance Life | 857 | 1,712 | 100.01 |
| HDFC Standard | 1,103 | 1,512 | 41.72 |
| Total (private) | 12,713 | 17,812 | 40.10 |
| Industry Total | 39,686 | 38,615 | 2.70 |
LIC, which was having about 90 per cent of its first year premium from unit- linked plans until 2007-08, has seen contribution from such plans to first year premium income at 76 per cent in first six months of the current financial year.
The insurance behemoth On Monday launched a single-premium endowment product called ‘Jeevan Aashta’ through which it plans to raise Rs 25,000 crore. Jeevan Aashta, a close-ended plan, will be available for the next 45 days. However, if LIC is able to meet its target before 45 days, then it may withdraw the plan.
Private sector
In the private sector, all major players have seen a fall in first year premium collection in October, barring SBI Life Insurance. SBI Life was able to increase its first year premium income in October by 4.5 per cent to Rs 330 crore.
