Policies sold by LIC decline 13%

The Life Insurance Corporation of India (LIC) has witnessed a 13 per cent fall in number of policies sold till February this year against the previous corresponding period.

The total policies sold by the industry has fallen by 9 per cent.

Till February this year, the state insurance behemoth sold 1.69 crore policies, while it sold 1.93 crore policies till February 2004.

The decline in number of polices sold by LIC was primarily due to a 15 per cent fall in individual non-single premium policies sold, which constitute a bulk of the insurance major's income from sales.

In absolute terms LIC sold 1.62 crore individual non single premium policies till February 2005 against 1.91 crore in the previous corresponding period. Individual non single premium policies contributed around 64 per cent of total premium income.

In terms of premium income this category witnessed a small 2.22 per cent growth at Rs 8,593.21 crore against Rs 8,406.89 crore in the previous year "" a Rs 186 crore rise.

Number of individual single premium policies however witnessed a 300 per cent growth at LIC in the same period, to 6.07 lakh policies against 1.51 lakh polices in the previous year.

Premium income from this category however contributed only 18 per cent of LIC's total premium income till February 2005.

Income from group single premium also witnessed a 15 per cent growth to 2615 policies against 14151 in the previous period. This category of policies contributed to 17 per cent of LIC's policy income.

Total income from premium at LIC till February 2005 stood at Rs 13,44,2.93 crore against Rs 11,37,1.27 crore in the previous period thus witnessing a 18.22 per cent growth.

Growth in premium income was primarily from the individual single premium policies which helped LIC earn Rs 2514.81 against Rs 704.04 crore in the previous period which was a large 257.20 per cent growth. This segment of LIC's policies has helped the company retain its growth rate.

LIC market share in terms of number of policies has however declined from 93.75 per cent to 90.32 per cent in the last one year.

The decline in number of policies sold by LIC was despite the fact that all private sector companies witnessed increase in number of policies.

Met Life almost doubled number of policies sold and achieved a 90 per cent growth followed by Max New York Life which witnessed a 56 per cent. The larger players like ICICI Prudential witnessed a 52 per cent growth.