Life Insurance Corporation of India's share of new individual policy premiums has dropped to 54% in December 2015 from 72% in December 2013. The drop comes after amendments to the I-T Act restricted tax breaks on policies which didn't have adequate life cover. LIC, however, continues to have a 70% overall marketshare in new premiums due to group policies.
LIC, which dominates the industry, has seen premium from new business coming under pressure and its marketshare continuously dropping. The country's largest insurer saw its share drop to 62% in December 2014 and further to 54% in December 2015.
While tax woes explain loss of interest in traditional cash cows for the corporation, the shrinking marketshare can be attributed to lack of a unit-linked insurance plan (ULIP) when the stock markets had recovered last year. Private players like ICICI Prudential made the best of a booming market. While LIC did launch a ULIP later in 2015, the markets had by then entered a downturn.
