Life insurers deployed Rs 3,941 cr in FY10

The life insurance industry deployed Rs 3,941 crore into the business in financial year 2009-10. According to data from Life Insurance Council, around 98(%) per cent of the capital was infused by private sector life insurers, while LIC, the behemoth public sector life insurer, saw mixture of Rs 5 crore during the previous financial year.

Reliance Life, HDFC Standard Life, Metlife Insurance, Aviva Life Insurance, Bharti Axa Life Insurance and Future Generali Life Insurance were along with the firms that infused capital in 2009-10.

“We infused close to Rs 231 crore in the previous financial year,” a senior official at Reliance Life said. According to him, the company will instill an equal amount of money in this financial year to uphold solvency requirements.

HDFC Standard Life infused Rs 172 crore to take its paid-up capital base to Rs 1,978 crore.

Companies such as ICICI Prudential Life, Bajaj Allianz Life and Kotak Mahindra Old Mutual Life did not infuse any capital in the previous financial year. “We did not infuse anything in the previous financial year as we were relaxed on solvency and profits were retained too,” said Kamesh Goyal, chief executive of Bajaj Allianz Life. According to him, the company will not infuse any capital in this financial year as well.

While the total capital deployed up to FY10 was Rs 28,929 crore (Rs 24,988 crore up to FY09 and Rs 16,692 crore up to FY08), management operating cost too have fallen considerably. Commission as a percentage of premiums has declined by 30 basis points to 6.71(%) per cent in FY10.

A release from the industry council said renewal premium of the industry grew 13(%) per cent to Rs 151,812 crore. Payouts to policyholders (claim settlements, bonus and money back) increased 42.82(%) per cent to Rs 83,327 crore in FY10 compared with Rs 58,343 crore in the parallel period last year.

“Life insurance companies have sold more than 2.8 crore policies in rural areas in FY09 and FY10. India also has the difference of having the largest number of in-force policies in the world,” said SB Mathur, secretary general of Life Insurance Council.

The total assets held by the industry stood at about Rs 1,290,000 crore as of March 31, 2010.