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Premium income in the life insurance sector declined 1.57 per cent at Rs 2.87 lakh crore in 2011-12 compared with Rs 2.91 lakh crore the previous year.
According to the Annual Report of the Insurance Regulatory and Development Authority for 2011-12, released recently, while private sector insurers registered a 4.52 per cent fall, Life Insurance Corporation posted a mere 0.29 per cent decline.
It was the growth in renewal premiums that saved the industry. These were up 4.77 per cent even as first-year premiums dipped 9.85 per cent, IRDA said.
Another divergent trend between the private and public sectors was the contribution of single-premium products.
Though they continued to be major drivers of LIC’s total premium growth, their contribution to the private life business declined during the period under review.
Unit-linked products
Unit-linked insurance products (ULIPs) suffered a sharp slide of 36 per cent, because of a new set of regulations brought into force by IRDA over two years ago. Their share in total premiums came down to 24.2 per cent (37 per cent). The premium from traditional products showed a corresponding growth.
During 2011-12, life insurers issued 442 lakh new policies, of which LIC’s share was 358 lakh.
The decline in business was also reflected in a decrease in the number of agents. Their number had come down to 23.59 lakh from 26.39 lakh. Private life insurers were hit by a higher dip in agent force. The state insurer still had the highest number of individual agents, at 12.78 lakh.
ATTRITION RATE
“One major concern that emerges from the data on agents’ numbers is the high percentage of attrition,” the report said.
While private insurers appointed 3.68 lakh agents, 5.89 lakh were terminated.
There was also a perceptible shift away from the individual agency channel, the report said.
GRIEVANCES
Many grievances reported during the year were resolved. Of a total of 3,09,613 complaints received, only 1,282 were outstanding as on March 31, 2012. Grievances about malpractices formed the bulk of the complaints.
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