IRDAI’s latest data shows that life insurers’ new business premium rose by 13% and crossed Rs14,400 crore in the last quarter as against Rs12,810 crore in the corresponding period last year.
LIC, the country’s largest life insurer, was the highest grosser in the first quarter of FY 2017-18. The state owned insurer recorded an increase of around 12% with the collection of new business premium of around Rs10,500 in the last quarter as against Rs9,350 crore in the corresponding period last year.
Amongst private players, SBI Life recorded a 37% rise in its new business premium. In Q1 FY 2017-18, the insurer collected the highest business premium of Rs805 crore as against Rs590 crore a year ago.
Other private life insurers, like HDFC Life and ICICI Prudential, also witnessed a good traction in new business premium. HDFC Life grew by 13%, from Rs604 crore in June 2016 to Rs681 crore in June 2017, while ICICI Prudential grew by 12%, from Rs594 crore in June 2016 to Rs668 crore in the first quarter of FY 2017-18.
Experts attribute the growth in new business premium to the substantial inflows in ULIP and implementation of GST.
Commenting on the rise of business premium, Manish Sanghal, Chief Agency Officer, Bajaj Allianz Life Insurance said, “A major portion of the new business premium came from ULIPs. Thanks to the stock market rally, these policies have been increasingly getting popular among policyholders. Also, many policyholders bought new policies before July due to the implementation of GST. The insurance premium has increased from 15% to 18% due to implementation of new rates for insurance.”
He further added, “Insurance awareness and constant efforts of the agents and distributors have catalysed the sale of insurance policies. Moreover, the renewal premium has also been rising due to the direct debit facility provided to policyholders. Now agents and insurance companies no longer have to follow up clients with this facility.”
Seconding his thought, Pankaj Mathpal, MD, Optima Money Managers, said, “ULIPs are the major source of premium income this fiscal. Many agents sold ULIPs to their customers by highlighting attractive performance of these policies. However, consumers need to be cautious of such policies as the net returns of ULIPs are comparatively lower than equity funds.”