Unlike non-life insurers which grow by a robust 19 percent this year, the life insurance sector has shrunk by 6 percent with the premium collection of Rs 84502 crore in April 2012 - February 2013 against Rs 90016 crore in the corresponding period last year.
IRDA data shows sharp decline in premium collections of private as well as public insurance sector. The premium collection of LIC has fallen by 6 percent while the private underwriters recorded 5.9 percent fall. LIC has a total premium collection of Rs 60705 crore against RS 64820 crore in the corresponding period last year while the private insurers have collected Rs 23796 crore against Rs 25145 crore last year.
February premium collection data also declined by 6 percent as the life insurers have collected Rs 7976 crore against Rs 8519 crore in the corresponding period last year.
However, the group single premium collection of insurers has surged by 15 percent raising some hopes of revival in the life insurance business. Following the trend, the premium collection of individual non-single has also risen by 2 percent.
Among private players, Reliance Life’s premium collection dropped by 24 percent whileICICI Prudential reported a downfall of 2 percent. However, the HDFC Standard Life has managed to increase its premium collection by 12 percent.
Pankaj Mathpal from Optima Money Manager attributed this decline to underperformance of market and mis-selling of insurance products by the agents. He said that many investors buy insurance products wealth creation and tax savings and not for risk mitigation.
A senior officials of a private insurance sector said that the life insurance sector is going through tough times but they are hopeful of recovery within six months.