Differing impact across products, some players manage to gain
THE tightening of regulatory policies on unit linked insurance plans (Ulips) of life insurance companies has had the effect of pushing down reckless selling by insurance companies and their agents. This was reflected in Insurance Regulatory and Development Authority's recently released figures of new life policies sold by insurance companies upto November.From April to November in this financial year, one out of every two life insurance companies saw a fall in the collection of new individual `non-single premium' policy premiums (the most significant contributor to total premiums collected in new policies sold) as compared to the same period in the previous financial year.
The industry aggregate collection, however, went up marginally by about 8.13 per cent from Rs 25,837 crore in April-November 2009 to Rs 27,938 crore in the same period this year. However, excluding Life Insurance Corporation of India that saw a growth in these policies, the growth was negative, with the aggregate collection falling by 1.62 per cent from Rs 14,579 crore to Rs 14,343 crore.
Among the 10 insurance companies with the largest individual `non-single premium' collections in the current FY, SBI Life, Reliance Life, Bajaj Allianz Life, Birla Sunlife, Tata AIG and Kotak Mahindra Old Mutual saw a year-on-year decline in collections.
Bucking the trend were LIC, ICICI Prudential, HDFC Standard Life and
Max New York Life.At the end of June, IRDA had come out with significant regulatory changes for ULIPs that were to come into effect from September 1. Important ones, from the investor’s point of view, pertained to a cap on charges
upto a maximum three per cent for a 10-year Ulip and another one was the capping of surrender charges. Said Mayank Bathwal, CFO and head of institutional sales at Birla Sunlife Insurance, “Though the industry has witnessed a dip in sales, this impact is transitional and in line with what was expected post the implementation of the IRDA guidelines.” With incentives for misselling coming down, insurance companies and agents did not push the non-single premium policies. Bathwal, however, said, “the introduction of enhanced and even more customer-centric solutions is re-enforcing the consumer sentiment for Ulips pointing towards a promising quarter ahead.” Interestingly, the Irda data revealed a surge in the growth of the single premium policies for individuals, with LIC leading the way (see table). The industry aggregate premium collection of these policies grew by 80 per cent from Rs 13,104 crore in April-November last year to Rs 23,664 crore in the same period this year.As as result, the share of single premium policies to aggregate of single and nonsingle policies shot up by 33.65 per cent last financial year to 45.85 per cent in this financial year.
Source :- My Digitalfc
