The latest annual report published by Insurance Regulatory and Development Authority of India (Irdai) stated that the life insurance industry recorded a premium income of `3,28,101.14 crore during 2014-15, against `3,14,301.66 crore in the preceding financial year, a growth of 4.39%.
However, unit-linked products (Ulips) registered a growth of 10.85 % premium from `37, 544.08 crore in 2013-14 to `41,616.94 crore in 2014-15.
Accordingly, the share of Ulips in premiums increased to 12.68% in 2014-15 as against 11.95% in 2013-14. Industry experts say that, growth in Ulips were largely due to the positive equity markets in the last financial year.
On the other hand, while private sector insurers posted 14.32%growth (1.33% decline in previous year) in their premium income, LIC recorded 1.15% growth (13.48% growth in previous year).
R M Vishakha, MD and CEO at IndiaFirst Life Insurance says, “For unit linked products I would say that, change made by the regulator few years ago is started showing positive results.” The report from Irdai also stated that, renewal premium accounted for 65.46 % (61.72 % in 2013-14) of the total premium received by the life insurers, first year premium contributed the remaining 34.54 % (38.28 % in 2013-14). During 2014-15, the growth in renewal premium was 10.72% (7.85% in 2013-14). First year premium registered a decline of 5.82% in comparison to a growth of 12.08% during 2013-14. At the end of March 2015, there are 53 insurance companies operating in India; of which 24 are in the life insurance business and 28 are in non-life insurance business. In addition, GIC is the sole national reinsurer. In the last financial year, life insurers issued 259.08 lakh new policies, out of which LIC issued 201.71 lakh policies and the private life insurers issued 57.37 lakh policies.
The Irdai report also added that, “The industry’s settlement ratio had slightly increased to 96.97% in 2014-15 from 96.75 % in 2013-14 and the repudiation ratio had remained at the same level of 2.08% in 2014-15 as in 2013-14 (2.08%).”