Business Daily from THE HINDU group of publications
Saturday, Jun 02, 2007
ePaper
Business Daily from THE HINDU group of publications Saturday, Jun 02, 2007 ePaper |
|
|
|
|
|
|
|
Money & Banking
-
Life Insurance Markets - Investments Radhika Menon
For the private insurers, it has been a different story. The premium per policy has marginally dropped from Rs 18,532 to Rs 18,073.
Mumbai June 1 Insurance is increasingly becoming an investment instrument rather than cover for life, with the market leader Life Insurance Corporation reporting substantial increase in the sale of unit-linked insurance plans (ULIPs). The average premium per insurance policy has zoomed by 47 per cent for the insurance industry in the recently concluded fiscal. It has jumped from Rs 5,922 in 2005-06 to Rs 8,732 in 2006-07. The sharp rise in the average ticket size for the industry has been mainly sparked off by a jump in the Life Insurance Corporation's rise in premium per policy, which increased to Rs 6,795 from Rs 4,378 in the previous year. Around 70 per cent of LIC's premium in 2006-07 came from ULIPs, where the premium is almost double that of a traditional product. "The rise in the case of LIC has been mainly due to the significant proportion of ULIPs, which includes a large number of single premium policies. In the case of LIC's individual regular premium policies, the jump has been from Rs 4,400 to Rs 7,400," said Mr S.V. Mony, Secretary- General, Life Insurance Council. For the private insurers, however, it has been a different story. The premium per policy has marginally dropped from Rs 18,532 to Rs 18,073. According to Mr Mony, penetration into smaller towns and the minimum obligations to rake in premium from rural areas has caused a fall in the average premium per policy for private insurers. The average ticket size for Bajaj Allianz Life has fallen from Rs 22,000 in 2005-06 to Rs 18,000 in 2006-07. "This was primarily because the component of single premium policies in our portfolio reduced to 22 per cent, from 55 per cent in the previous year," said Mr Sam Ghosh, CEO, Bajaj Allianz.
Average ticket size
The average ticket size also depends on the distribution channel used by the insurance company. "The average ticket size of a policy sold by our bancassurance partner Standard Chartered Bank stands at Rs 40,000, while in the case of our agents it is around Rs 15,000. Banks tap high worth individuals and hence, the premium per policy is higher," he said. "The top private insurance players have all aggressively entered the health insurance space. While the volume of health oriented policies is large, the premium per policy is lower than ULIPs or traditional products," said Mr Pranav Mishra, Senior Vice-President, ICICI Prudential Life Insurance. However, some private companies such as SBI Life have reported an increase in the average premium. "We have reported a substantial increase in average premium per policy since we aggressively moved into the ULIPs market in 2006-07. The premium in the case of ULIPs is twice as much as that of a traditional policy," said Mr Pier-Paolo Dipaola, Deputy Chief Executive Officer, SBI Life.
Related Stories: More Stories on : Life Insurance | Investments
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2007, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|