The Hindu Business Line : ULIPs growing at a fast clip

THE unit-linked insurance policies (ULIPs) have significantly contributed to the first year premium of life insurance companies, both public and private, during the first nine months of fiscal 2004-05.

As against six per cent contribution during the first nine months of 2003-04, ULIPs accounted for 26 per cent of first year premium of life insurers during this period of last fiscal, at Rs 13,153.12 crore. .

The contribution of ULIPs was more prominent in the case of private players when compared to Life Insurance Corporation (LIC).

According to the figures from the Insurance Regulatory and Development Authority (IRDA), LIC's first year premium had a 15 per cent component of ULIPs, while private sector had a large component of 36 per cent.

Of the total premium underwritten by the life insurers during the first nine months of 2004-05, the contribution of ULIPs stood at as high as Rs 3,357.44 crore (26 per cent), while non-linked segment amounted to Rs 9,778.66 crore (74 per cent).

Both among linked and non-linked segments, `life' business dominated the premium with over 80 per cent of share, while `general annuity,' `pension' and `health' businesses amounted to less than 10 per cent each.

Meanwhile, the insurance regulator has taken up a review on the opening up of insurance sector to private participation and the economic benefits accrued to individuals, business and industrial establishments, apart from the economy as a whole. The regulator has also acknowledged the significant contribution of ULIPs to the growth of insurance sector in the country.

"The significant trend is that unit linked policies are growing at a particularly fast pace. This has implications for the customers which, we hope, are fully understood by all concerned," the IRDA Chairman, Mr C.S. Rao, said in a latest communique to industry stakeholders.

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