In April, private companies continued to be a drag on the life insurance sector’s new premium collection. Data collected by the Insurance Regulatory and Development Authority (Irda) showed private insurers collected Rs 1,125 crore by writing new policies in April, down 16.3 per cent compared with Rs 1,345 crore in the same month last year.
The country’s largest life insurer, government-owned Life Insurance Corporation (LIC), reported only a 2.5 per cent increase in new premium collection in the same period, at Rs 3,812 crore (see table). As a result, total new premium collection by the 23 life insurers in the country fell 2.5 per cent to Rs 4,937 crore in April from Rs 5,063 crore in the same period last year.
While lack of products continued to remain a key reason behind this fall in collection, the volatile equity market is taking its toll. The worst sufferers are private life insurers; the number of policies issued by them was down 18 per cent in April. The number of policies issued by LIC declined, too, 11 per cent. As a result, total policy issuance by the industry declined 12 per cent in April.
During 2011-12, premium collection by the life insurance sector was down 9.2 per cent to Rs 1,14,233 crore, as against Rs 1,25,826 crore in the previous financial year.
The general insurance industry, on the other hand, continued to clock steady growth in April, as gross written premium grew 15.7 per cent compared with the year before.
According to data collated by insurers, the sector collected premiums worth Rs 6,506 crore by writing new policies during April, as against Rs 5,622 crore in the same month last year.
While private insurers registered growth of 10.4 per cent to Rs 2,819 crore, the four state-owned general insurance companies’ collection rose 20.2 per cent to Rs 3,687 crore.