Life insurers see income fall by 2 per cent in first half of FY15

The life insurance industry has seen flat growth in new prermium income in the first half of the current fiscal as the Insurance Regulatory and Development Authority (Irda) has asked companies to sell only new products, while the non-life players saw their new business growing 10 per cent.

"The prime reason behind the flat result was the high base effect last year following the new guidelines set by the sectoral regulator Irda, which asked life players to bring in new products. So this year there was no trigger for the industry in the April-September period," Life Insurance Council Secretary General V Manickam told PTI.

The new businesses premium collected by the life insurance industry during the first half fell by 1.75 per cent to Rs 49,179 crore, against Rs 50,058 crore a year ago, according to the data collated by the Life Insurance Council.

But the fall in the number of new policies sold by the life insurance industry was much sharper with new policy sales plunging 52 per cent to 95,69,626 from 1,99,86,000 in the year-ago period.

In 2013, Irda had asked life insurers to focus on bringing in new products and had set a December 31, 2013 deadline for existing products, which saw companies going on a selling spree.

Interestingly, the new regulatory order was issued by the regulator in this connection on September 30, 2013 with an initial deadline of October 1. However, Irda later extended the expiry date to December end on request from insurers.

During September 2013 itself, the companies were able to sell 68 lakh new policies selling existing products and thus underwriting the premium to the tune of Rs 11,223 crore. In contrast, they sold only 22 lakh policies during September this year and thus underwriting premium to the tune of Rs 8,660 crore.

As of now, there are a total 450 products being sold by the industry which include 322 products under individual category.

All the insurance companies are able to bring sizeable junk of premium now. It shows the acceptability of products in the market, he said.