Changes in ULIP regulations impact LIC and private players; industry hopeful of recovery.
The life insurance industry ended FY12 with a 9.21% dip in new business premium. A top industry executive told Cafemutual that new ULIP regulations (causing a change in product offerings) have caused this decline.
Private insurance companies registered a decline of 16.92% in first-year premium collections, while LIC saw a 5.7% fall.
“All life insurance companies are struggling hard to record a positive premium collection as the industry in going through a series of fresh changes in regulations as well as product offerings. We feel that the industry will take eight months to show positive growth,” says a CEO and MD of a top life insurance company, preferring anonymity.
According to IRDA data, 24 life insurance companies managed a premium collection of Rs 1,14,232.73 crore in new business premium in FY12, compared to Rs 1,25,826.03 crore in the previous fiscal.
Individual single premium witnessed a fall of 48.70% with a collection of Rs 18,401.75 crore compared to Rs 35,873.52 crore. Insurers are trying to push the sale and renewal of traditional policies, due to changes in ULIP regulation. Most players are now focusing on sale of traditional policies.
A few private players have recorded positive growth—IndiaFirst Life Insurance recorded 38.94% growth, DLF Pramerica Life Insurance clocked 39.38% and MetLife India Insurance recorded a 52.69% growth in first-year premium for the fiscal ended March 2012.