Plans

LIFE insurance companies are collecting increasingly higher premium from group insurance policies, while, the collection from individual policies are declining.
As per the data available with Insurance Regulatory and Development Authority (Irda), group single premium policies continue to grow steadily.
Generally, insurers provide group term insurance plans, gratuity policies and leave encashment policies to the organisations under this segment.

The insurers collected first year premium of Rs 11,468 crore from group single premium policies in half yearly period of February 2010 July 2010, which rose to Rs 12,470 crore in August 2010January 2011, growth of 8.73 per cent. This further wit nessed a sequential growth of 14.84 per cent in February 2011July 2011 period, with collection of Rs 14,320 crore.

Group regular premium policies have, however, witnessed irregular growth. During February 2010 July 2010 period total new premium collection was Rs 6,030 crore and the same rose to Rs 8,690 crore in August 2010January 2011 period. The surge of 44.11 per cent may be attributed to the huge group insurance contracts made by Life Insurance Corporation of India (LIC) in the month of August 2010 of worth Rs 5,308 crore.

During February 2011 July 2011 period, this segment, sequentially grew at a nominal 12.12 per cent, with total collection of Rs 9,743 crore. During this period also, LIC collected more than Rs 1,000 crore from regular premium group policies in the months of February, May and July.

While, the individual premium business was impacted by the Ulips norms and insurers were trying to come up with new products to survive in the market, the group insurance segment continued to do well. “The main reason of insurers maintaining healthy group insurance business is the dominance of traditional products in this segment. Also, individual business will grow soon and the market is expected to stabilise towards the end of this calendar year,“ said a senior LIC official, who refused to be named.

Also, the analysis shows that life insurance companies are seeing continuous decline in single premium individual policy segment.
The first year premium collected from single premium individual policies during February 2010July 2010 was Rs 20,893 crore, which decreased to Rs 17,706 crore in August 2010January 2011 period, a dip of 15.25 per cent. This further declined to Rs 12,422 crore during February 2011 -July 2011 period, a sequential de-growth of 29.84 per cent.

However, collections from individual regular premium policies have improved. During February 2010July 2010 period insurers collected Rs 29,800 crore, which reduced to Rs 21,884 crore during August 2010January 2011, a decline of 26.57 per cent.
In February 2011July 2011 period insurers managed first year premium of Rs 21,126 crore, which is only 3.46 per cent lower than the previous halfyearly period.