Insurers blame it on falling number of agents and slow product approval.
According to recent IRDA data, the life insurance industry saw a 6 percent fall in total premium collections April to January period during the current fiscal compared to last year.
With a fall of 6.5 percent, the new business premiums of LIC saw a sharper dip than the life insurance industry. LIC collected new premium of Rs 55,305 crore for April to January 2013, as compared to Rs 59,145crore in same period last year.
Private insurers, on the other hand, collected Rs 21,220crore compared to Rs 22349 crore last year, reporting a dip of 5 percent.
According to data issued by IRDA, total new business premium collection of life insurers till January 2013 stood at Rs 76,525crore compared to Rs 81496till January 2012.
According to industry experts, the key reason for the drop in premium is due to dip in number of life insurance agents and the slow product approval. But insurers who are more dependent on bancassurance hope to see a positive growth in this last month of the current fiscal.
“Insurers are facing difficulty in scaling up agents in the life insurance industry which is leading to the de-growth. But IndiaFirst has shown positive growth and we hope to continue it in this last month too. Most of the players are now trying to strengthen bancassurance model to solve the distribution issue currently prevailing in the industry,” said Dr P Nandagopal, IndiaFirst Life insurance.