Life insurance industry sluggish in Q1

KOLKATA: The life insurance industry has stopped growing ��� at least that's what the first quarter data released by the Insurance Regulatory & Development Authority (IRDA) the indicates. The growth achieved by Life Insurance Corporation (LIC) in the quarter ended June 2009 has been negated by the decline in premium income of the private sector, resulting in a 1% growth during the period.

The public sector insurance behemoth, LIC, managed a 20% growth to Rs 9,028 crore during the first quarter of the current fiscal against Rs 7,524 crore in the previous corresponding period. Its market share stood at about 62.45% during the quarter. Sale of number of policies grew 23% during the period under review.

The industry managed to register a total new premium income of Rs 14,456 crore during the period against Rs 14,320 crore in the previous period. The private insurers managed a total new premium of Rs 5,427 crore in the first quarter against Rs 6,795 crore in the previous quarter. The decline has been the result of a 46% decline in premium income from individual single premium policies, and a 21% decline in individual non-single premium policies.

According LIC officials, the growth has been the result of a thrust on increasing the number of agents qualifying for Million Dollar Round Table, a massive retraining and orientation programme which involves re-training of almost 50% of all agents. Additionally, the stockmarket has been performing relatively better, Hence, sale of unit linked policies have also improved to some extent.

Almost all private companies including ICICI Prudential, Bajaj Allianz, Tata AIG and SBI Life saw premium incomes fall by as much as 49%, 30%, 24% and 6% respectively.

In terms of number of policies (NoP), ICICI Prudential and Bajaj Allianz saw a fall of 41% and 28% respectively. While SBI Life managed a small 6% growth. Interestingly, Reliance Life emerged the insurer with the highest number of policies sold during the quarter with a 41% growth rate.

It held the third position in the previous corresponding period. In terms of growth, Reliance Life registered a growth of 32.5% in June '09 over June '08 and 6.9% over Q1 2008 in terms of new business premium. Birla Sunlife, on the other hand, saw its NoP sales nearly double.