Growth was largely driven by LIC which collected Rs. 90,124 crore.
After two consecutive years of decline, life insurance companies saw a healthy growth in new business premium collection in FY 2013-14.
IRDA data shows that the new business premium collection of the insurance industry grew by 12% in the last fiscal. The 24 players mopped up Rs. 1.20 lakh crore in April-March 2014 against Rs. 1.07 lakh crore in the corresponding period last year. The industry sold over four crore insurance policies last fiscal.
Life insurance industry new business premium collection growth
|
Financial Year (April to March) |
Private - Growth in new business premium in % |
LIC - Growth in new business premium in % |
Gross - Growth in new business premium in % |
|
2013-14 |
-4 |
18 |
12 |
|
2012-13 |
-6 |
-6 |
-6 |
|
2011-12 |
-17 |
-6 |
-9 |
|
2010-11 |
3 |
22 |
15 |
|
2009-10 |
12 |
34 |
25 |
Source: IRDA
The growth was largely driven by LIC which alone contributed Rs. 90,124 crore in industry’s new business premium kitty in FY 2013-14 compared to Rs. 76,488 crore in the corresponding period FY 2012-13, a growth of 18%.
Suresh Sadagoppan of Ladder7 Financial Advisories attributes this growth to strong agency penetration and good track record of LIC. He said LIC had opened some new branches in small cities which helped it collect good premium from these areas. Also, LIC has earned a good image among people due to its performance and healthy claim settlement ratio. In addition, LIC had held training programmes across the country for agents to empower its strong distribution force, he added.
However, some experts believe that LIC and its agents had sold policies by misguiding people about new product guidelines till December. “Due to aggressive sales pitch by its agents and misleading promotion through advertisements which propagated - 'last time to buy your favourite product', the company had garnered inflows ahead of the proposed changes in policy structure and commission payouts by IRDA,” says a Mumbai based financial adviser.
“Many insurance agents and companies pushed their products by misguiding people that new policies will have high premium structure and low bonuses from January 2014,” says Pankaj Mathpal of Optima Money.
On the other hand, the new business premium collection of private life insurers declined by 4% in FY 2013-14. Private life insurers collected Rs. 29,517 crore last fiscal as against Rs. 30,748 crore the previous year.
Baring Reliance Life, Max Life and Kotak Mahindra Old Mutual all other large insurance players like SBI Life, ICICI Prudential, Bajaj Allianz recorded a steep fall in their new business premium collection last fiscal.