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LIC's individual premium collection down 23.53% in Apr-Sep

Insurance giant's market share fell to 69.21% in FY2014-15 from 75.33% in the previous fiscal

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Country's largest insurer Life Insurance Corporation of India registered 23.53% de-growth in the individual premium collection for the half year ended September 30, 2015.

In a performance report submitted to the Standing Committee on Finance last month, the state-owned insurer said its market share fell to 69.21% in FY2014-15 from 75.33% the year before, when it had peaked. The number of policies it sold in FY2014-15 fell 41.6% to 201.37 lakh, and the first year premium collection also fell 21.42% to Rs 32,827.30 crore during this period.

Collection of premiums for the private sector last year was Rs 38,000 crore, out of which Rs 14,000 crore was from unit-linked insurance plans (Ulips).

The corporation says the new set of regulations from the Insurance Regulatory and Development Authority of India (Irda) in 2014 for product transparency and customer protection is resulting in the dwindling sales and market share. The competition from private players, staff attrition is also hitting the corporation. Losing officers to the private sector at high salaries is also another problem that LIC is trying to address. In the last fiscal, about 928 officials left LIC for greener pastures.

LIC added in the report that due to the regulatory changes brought in by Irda with effect from January1, 2014, the new business performance of the corporation has been adversely affected as it closed 58 old plans which were later replenished in a phased manner. The products of the insurance industry had to be revamped after the Ulips were disguised and sold rampantly by both private and public insurers.

After the revamp, LIC has come out with 18 new products in phases and today it has 21 new plans.

Product innovation is taking place across the board and many private players had to wind up far more products as they were mis-selling Ulips. Now, the traditional products are also becoming very transparent for the insured, specifying the minimum payout. Most companies have scaled down their Ulip offerings by more than half.

In the wake of the prevailing conditions, LIC has realigned its market strategies with changed business equations, says the insurer in the report. It claims to have succeeded to large extent in repeating the volumes procured under normal business conditions in the preceding years.

For this, LIC is planning a big drive in recruitment of agents, arresting termination of agents, focusing on probationary development officers, increasing the financial status of the agents through close monitoring of their performance and recycling of claims to retain our existing customers and tapping new markets.

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