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Radhika Menon
N.S.Vageesh

Mumbai/Chennai , March 17

YOU could call it the Tides of March. We are referring to the way life insurance policies are sold in such profusion during this month.

The life insurance business is not meant to be a seasonal business. Yet, if one were to look at the business figures over the past few years, that conclusion is almost inescapable.

A full 35 per cent of the business for the year is done inMarch.

One reason for this pattern was simply the existing tax regime. Insurance was sold more as a tax saving device than as a protection tool. Those who had to save some more tax would take on either policies or extra add-ons to their existing policy.

In 2002-03, a whopping 50 per cent of the premium income and about 30 per cent of the policies came in during March. The sharp rise in premium income during that month (March 2003) is probably accounted for by the sale of single-premium policies, which were very popular then.

In 2003-04, 30 per cent of the premium income (Rs 5,670 crore) and about 28 per cent of policies (ie 79.96 lakh policies) were in March.

Asked to explain this trend, Ms Shikha Sharma, Managing Director, ICICI Prudential Life Insurance Company, says, "To a certain extent this is a sort of historical legacy that insurance selling happens mainly in March. While four years ago, almost 50 per cent of our business came in the January-March period, it has been declining by 5-6 per cent every year and it will continue do so. But having said that, January-March still continues to be a crucial period."

Another reason for the peaking of sales in March is simply because it is the end of the financial year. Life insurance advertisements are being beamed continuously at the potential market. Besides every agent has targets to achieve - and some have to save their agencies too. They become a bit more active - pushy and solicitous during this period. Says Ms Anjana Grewal, Vice-President, Marketing and Communications at Birla Sun Life, "The sale of insurance peaking in March has been traditional because of the year ending. But with the new Budget proposals coming up now, things might look different from next year."

According to Mr Muralidharan, Chief Marketing Officer, SBI Life, "We are trying to smoothen things out. It is more an operations management issue. One has to try and balance out sales over the whole year. Last year, about 35 per cent of our business came in March. The year before that it was 50 per cent and this year we expect it to be about 20 per cent. So in that sense we have succeeded in evening out our sales and shift the bulk of our sales from March."

Despite these efforts, it does seem as though this phenomenon will not go away in a hurry. Market leader LIC has sold more than 15 million policies till February 15. The target for March - another 15 million!

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