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Aviva Life Insurance Co India Ltd is expecting a 5-7 per cent drop in its first year premium collections to Rs 600-700 crore by the end of this fiscal (2013-14).
Renewal premiums or premium from existing subscribers are expected to remain flat at around ` 1,200 crore this year.
According to TR Ramachandran, CEO & MD, Aviva Life Insurance, a slowdown coupled with roll-out of products under the new guidelines of the regulator (Insurance Regulatory and Development Authority) saw a decline in premium collections.
New guidelines were introduced by IRDA from January this year.
“A situation of rising interest rates and low savings coupled with introduction saw slow off-take in the sector. First year premium collections are likely to decline by around 5-7 per cent,” he told reporters during a press conference.
Aviva though is hoping to do well in the fourth quarter (January to March) – a strong period for insurance companies. It is hoping to do better than its performance in the previous quarters of the fiscal.
“Most of our policy sales take place in March. Hopefully, this will be a good time as the market settles down and new products see traction,” Ramachandran added.
The company, which has been in black for the last three years, reported profits to the tune of Rs 33 crore in 2012-13. It is looking at earning profits again this year.
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