Life Insurance Corporation of India may see lower premium income in the first half of this fiscal as it faces much reduced product portfolio as well as problems related to selling new products.
S B Mainak, Managing Director of LIC, told reporters on the sidelines of an event organised by the Bengal Chamber of Commerce and Industry that things might improve after the insurer gets nod from the insurance regulator for a bunch of proposed new products and start selling them in the market.
The Insurance Regulatory and Development Authority had ordered discontinuation of sale of old life insurance products since January 1 and come up with new products that are compliant with its revised guidelines. Due to this, LIC’s premium income dropped since January this year.
Currently, LIC has around 12 products, down from 54 until December 31, 2013.
The new regulatory complaint products are yet to get acceptance in the market place. “Field agents are finding it extremely difficult to sell new products”, Mainak said. Separate charge of service tax, which earlier reduced the benefits, was one of the main reasons for slow sale.
In January-March quarter this year, LIC saw new premium collection of Rs 24,350 crore, 7.1 per cent lower than Rs 26,210 crore in the corresponding quarter last year.
New premium collection from old policies until December-end largely contributed to the yearly total (2013-14) of Rs 90,123 crore, up 17.82 per cent.
“Since January LIC and the industry as a whole has witnessed negative growth," he added.
The country’s largest insurer expects the sales to pick-up in the second half of the fiscal as result of more approved new products as well as new marketing strategy.
“We need to re-look at our marketing strategy for selling new products. It takes time to develop new products… We are expecting approval for some new products shortly,” Mainak added.