Calcutta: The life insurance business in the country is fast losing its steam. The premium income of life insurance companies from the sales of new policies in 2007-08 grew only 23.3 per cent compared with 110 per cent in the previous financial year.
Life insurers’ income from first year premiums stood at Rs 92,988.17 crore at the end of March this year compared with Rs 75,406.52 crore in 2006-07 and Rs 35,897.95 crore in 2005-06.
Since the opening up of the segment to private players and the introduction of market-linked products envisaging better return than traditional plans, the first year premium income of life insurers has been growing over 100 per cent. A large part of this growth came from an unprecedented surge in single premium policy sales, both in the group and the individual segments.
However, last fiscal saw a significant slowdown in sales of single premium policies. Individual single premium policy sales in 2007-08 grew to Rs 28,770.68 crore from Rs 23,545.99 crore in 2006-07 and Rs 10,998.99 crore in 2005-06.
A similar slowdown was seen at the group policy level, too. Group single premium policy sales in 2007-08 were Rs 11,872.17 crore, which were lower than Rs 12,422.04 crore in 2006-07. In 2005-06, group single premium policies accounted for a total premium income of Rs 4,406.24 crore.
In individual non-single premium policies, growth came from the sales of unit-linked plans only. The first year premium income from the sales of individual unit-linked policies went up to Rs 39,454.50 crore at the end of March this year from Rs 19,365.45 crore a year ago and Rs 6,248.28 crore in 2005-06.
New premium incomes from traditional policies, on the other hand, have come down to Rs 10,314.69 crore from Rs 18,544.57 crore at the end of March 2007 and Rs 13,619.27 crore in 2005-06.
Sum assured in individual regular premium policies grew 17 per cent to Rs 5,54,862.39 crore from Rs 4,74,379.10 crore at the end of March 2007. The slow growth in sum assured is attributable to a decline in the sales of individual traditional policies and riders there on.
Source: The Telegraph
Monday, July 7, 2008
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