In another sign of weakening investment environment, the life insurance industry witnessed a 5 per cent decline in its total premium collections for the quarter ended June on the back of a sharp fall in new business premium during the quarter even as the renewal premium witnessed a double- digit growth.
According to the data released by the Life Insurance Council on Monday, the industry witnessed a 28 per cent drop in its new business premium from Rs 25,522 crore last year to Rs 18,282 crore by the end of June 2011. The industry, however, witnessed a 13 per cent rise in its renewal premium from Rs 32,959 crore in the quarter ended June 2010 to Rs 37,221 crore in June 2011.
The total collection for the industry dropped from Rs 58,559 crore to Rs 55,523 crore.
The industry, however, saw its total assets under management (AUM) cross Rs 15 lakh crore mark to touch Rs 15,04,629 crore against Rs 13,50,850 crore last year.
Experts say that Ulip investments have gone down.
“Investors are very wary of the market now,” said SB Mathur, secretary general, Life Insurance Council. “The total premium collections show a dip because last year the numbers in the first half grew very sharply and thus the base grew high. I expect that the numbers for the full year will be in line with what they were last year.”
The insurance industry grew aggressively in the first five month of 2010 (between April and August) as they anticipated the change in the Ulip guidelines from September 1, 2010.
“If you consider the new business premium collected in last two years for the same period, the industry’s premium collection has grown at 13 per cent CAGR despite a fall this year,” said the Life Insurance Council statement.
The industry has also witnessed a fall in the number of its insurance agents by around 4 lakh as it has come down from 28.16 lakh last year to 24.27 lakh now.
Experts say that companies are unwilling to retain less productive agents now.
The life Insurance industry’s contribution to infrastructure development however continues to be robust and the investment in infrastructure has risen to Rs 2,00,235 crore from Rs 1,42,445 crore.
In need of a lifeline
* Life insurance industry witness 5% decline in its total premium collections for the quarter ended June
* Renewal premium, however, witness 13% rise from Rs 32,959 crore in the quarter ended June 2010 to Rs 37,221 crore in June 2011
* Total collection drops from Rs 58,559 crore to Rs 55,523 crore
* Ulip investments down, say experts
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