The Hindu Business Line : LIC new premium income declines 9.8%

Kolkata, April 27 The Life Insurance Corporation of India suffered a 9.8 per cent decline in new premium income (FPI) in 2008-09 compared with 2007-08.

The segment-wise break-ups show that decline in retail FPI during the period was 19.38 per cent, partly offset by 35 per cent rise in new business premium from the group insurance segment, despite tight liquidity in the economy. The group insurance accounted for nearly one-third of LIC’s total business during the period.

LIC collected Rs 47,828.53 crore of new premiums through all channels during the period compared with Rs 53,068.47 crore in 2007-08.

While individual retail business was hit in March, most of its corporate clients renewed the premium covers for employee pension, gratuity and leave encashment schemes, according to a senior LIC official. “Except a few small-sized companies, we have not experienced any major lapses in premium payment in the group insurance business this year,” he told Business Line. Some companies, however, delayed the premium payment on time in order to tide over the immediate liquidity crunch, he added.

The corporation collected Rs 12,507.32 crore of new business from pension and group schemes (PNGS) as on March 31, surpassing the target of Rs 10,000 crore set for the fiscal. It sold 15,851 policies and covered 2,07,06207 lives under the segment. In the month of March itself the premium collection was Rs 3,356.36 crore, at a moderate growth rate of 8 per cent over the same period last year.

The major contributors to group insurance premium for the year were Tisco, Central Bank of India, Coal India, Damodar Valley Corporation, ITC, the Kolkata and Visakhapatnam ports, United Bank of India and the UCO Bank and leading IT majors such as TCS and Infosys, the officer pointed out.

Retail performance

The retail business was however hit with first premium income at Rs 35,321.20 crore, registering an achievement rate of 62 per cent of the yearly target of Rs 57,000 crore. While the guaranteed return single premium policy Jeevan Astha contributed nearly one-third of the total new premium collected over the year in a span of only 45 days shelf life, its other guaranteed return regular premium policy Jeevan Varsha did not perform well because of its high premium rates, an LIC agent said.

Only the Eastern Zone of the corporation registered a positive growth rate in retail business at 4.56 per cent, while all other zones suffered decline in FPI. The Western Zone topped in the country in FPI collections (Rs 7,716.1408 crore), followed by the Northern Zone (Rs 6,373.0271 crore) and South Central Zone (Rs 4,534.1489 crore).

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