New Delhi: Rising home loan rates and a recent surge in stock markets are weaning away household savings from the life insurance industry, which has witnessed a nine per cent drop in total premium collection during the first quarter of this fiscal.
The total premium fell to Rs 12,511.8 crore during the quarter ended June 30, as against Rs 13,737.4 crore in the corresponding period last fiscal.
The industry posted a 110 per cent growth in total business at Rs 75,406.52 crore in 2006-07 from Rs 35,897.96 crore in the previous year.
Home loan interest rates have risen by about two per cent in the last one year. Barring the 514 points crash on the Bombay Stock Exchange on July 27, the markets have been on an upswing.
The BSE 30-share index touched an intra-day high of 15,868.85 on July 24. It closed at a new peak of 15,794.92 points on the same day.
According to a senior LIC official, a hike in interest rates on home loans has resulted in an unexpected rise in the equated monthly installments (EMIs). As a result, many people have deferred their plans to save in insurance policies.
Besides, the surge in stock market over the last few months has also attracted people to invest in equities and mutual funds.
During the first quarter this fiscal, single premium collection on polices dipped more than 57 per cent at Rs 3,137.35 crore as compared to Rs 7,312.99 crore in the same period a year ago.
Source: PTI
Saturday, August 4, 2007
Private sector peers outsmart LIC in Q1
Private players are growing big in insurance. The first quarter of the current fiscal has seen them notch up over 31 per cent and 22.6 per cent shares in the life and non-life space, respectively.
The overall life premium garnered by insurance companies declined by close to 9 per cent to Rs 12,512 crore in the period from the corresponding quarter of the previous year.
The decline in the life premiums was largely due to a 20 per cent drop in collections from life behemoth Life Insurance Corporation (LIC). Private players saw a 33 per cent rise in life premiums in the period. On the other hand, there was a 12 per cent increase in the overall general insurance premium in the first quarter of the current year.
These figures are based on approximate statistics of the Insurance Regulatory and Development Authority (IRDA) collated by DNA Money over the first quarter of the year.
Insurance industry analysts say the first quarter has thrown up some interesting trends in the sector. Compared to the first three months of the current year, single-premium plans raked in the moolah for all companies in the first three months of 2006-07.
The comparative drop in premiums this year is mainly attributed to the modifications on unit linked plans which came through last July and companies went overboard in selling policies before the changes. Unit linked policies constituted a major portion of the individual single premium plans in the first three months of 2006-07. Premiums from single premium plans in the first quarter this year constituted 25 per cent of the overall portfolio against 53.2 per cent last year.
Individual non-single premiums comprised of 61 per cent of the total premium in the first three months in 2006-07 compared to 36 per cent last year. In the midst of the overall premium change in the first quarter, LIC's share dropped to 68.6 per cent till June 30, as against 78.5 per cent in the corresponding three- months of 2006-07.
Source: DNA Money
The overall life premium garnered by insurance companies declined by close to 9 per cent to Rs 12,512 crore in the period from the corresponding quarter of the previous year.
The decline in the life premiums was largely due to a 20 per cent drop in collections from life behemoth Life Insurance Corporation (LIC). Private players saw a 33 per cent rise in life premiums in the period. On the other hand, there was a 12 per cent increase in the overall general insurance premium in the first quarter of the current year.
These figures are based on approximate statistics of the Insurance Regulatory and Development Authority (IRDA) collated by DNA Money over the first quarter of the year.
Insurance industry analysts say the first quarter has thrown up some interesting trends in the sector. Compared to the first three months of the current year, single-premium plans raked in the moolah for all companies in the first three months of 2006-07.
The comparative drop in premiums this year is mainly attributed to the modifications on unit linked plans which came through last July and companies went overboard in selling policies before the changes. Unit linked policies constituted a major portion of the individual single premium plans in the first three months of 2006-07. Premiums from single premium plans in the first quarter this year constituted 25 per cent of the overall portfolio against 53.2 per cent last year.
Individual non-single premiums comprised of 61 per cent of the total premium in the first three months in 2006-07 compared to 36 per cent last year. In the midst of the overall premium change in the first quarter, LIC's share dropped to 68.6 per cent till June 30, as against 78.5 per cent in the corresponding three- months of 2006-07.
Source: DNA Money
Don’t wait for the agent to pay your insurance premium
Mumbai: Gone are the days when you had to wait for your insurance agent to collect cash or cheques in favour of your insurance company. Tired of matching the agent’s time with their own, some people investing on a monthly basis were forced to hand over the agent the premiums for a few months at one go.
Needless to say, such investors lost the opportunity to gain appreciation on the advance premium they paid. They could have earned a minimum of 3.5 per cent interest on an annual basis even if the money was left in their savings bank accounts.
Today, most insurance companies have introduced facilities to help investors pay insurance premium as per their convenience and by themselves well after the business hours. Besides saving on transportation costs, electronic payments make sure that the premium is paid the same day and not with the time lag associated with cheque payments.
One could choose from among facilities like electronic clearing service (ECS), auto debit, Netbanking, credit cards, ATM centres and e-pay sites like Bill Desk and Bill Junction. Here are some points to keep in mind:
The customer needs to give a mandate to the insurance company in case of an ECS and to the bank for an auto debit from his/her account.
One could pay through ATMs of banks that an insurance firm has a tie-up with. For instance, SBI Life has one with parent State Bank of India.
Some insurance firms offer the facility of paying through Netbanking. LIC, though, currently offers the facility only for non-ULIP products. However, you would be disappointed if you are looking to pay LIC premium through credit cards.
Other firms have also started offering payment facilities on cell phones. ING Vysya Life, for one, has launched a facility wherein one can pay premium via short message service. With mobile penetration deeper than that of internet, such facilities could be of help to more customers. Currently, however, only account holders of Corporation Bank and Citibank can pay their premium for ING Vysya Life through this route.
Yet other insurance firms have installed electronic data capture machines at their branch locations.
All the same, like in the case of other services provided by banks and insurance companies, these new premium-paying facilities can be availed only after registering. In most cases, the registration has to be done only once. Also, facilities such as ECS and payment through pay sites are available only in select cities, while auto debit is available on select banks.
Source: DNA Money
Needless to say, such investors lost the opportunity to gain appreciation on the advance premium they paid. They could have earned a minimum of 3.5 per cent interest on an annual basis even if the money was left in their savings bank accounts.
Today, most insurance companies have introduced facilities to help investors pay insurance premium as per their convenience and by themselves well after the business hours. Besides saving on transportation costs, electronic payments make sure that the premium is paid the same day and not with the time lag associated with cheque payments.
One could choose from among facilities like electronic clearing service (ECS), auto debit, Netbanking, credit cards, ATM centres and e-pay sites like Bill Desk and Bill Junction. Here are some points to keep in mind:
The customer needs to give a mandate to the insurance company in case of an ECS and to the bank for an auto debit from his/her account.
One could pay through ATMs of banks that an insurance firm has a tie-up with. For instance, SBI Life has one with parent State Bank of India.
Some insurance firms offer the facility of paying through Netbanking. LIC, though, currently offers the facility only for non-ULIP products. However, you would be disappointed if you are looking to pay LIC premium through credit cards.
Other firms have also started offering payment facilities on cell phones. ING Vysya Life, for one, has launched a facility wherein one can pay premium via short message service. With mobile penetration deeper than that of internet, such facilities could be of help to more customers. Currently, however, only account holders of Corporation Bank and Citibank can pay their premium for ING Vysya Life through this route.
Yet other insurance firms have installed electronic data capture machines at their branch locations.
All the same, like in the case of other services provided by banks and insurance companies, these new premium-paying facilities can be availed only after registering. In most cases, the registration has to be done only once. Also, facilities such as ECS and payment through pay sites are available only in select cities, while auto debit is available on select banks.
Source: DNA Money
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