The total premium fell to Rs 12,511.8 crore during the quarter ended June 30; as against Rs 13,737.4 crore in the corresponding period last fiscal.
The industry posted a 110 per cent growth in total business at Rs 75,406.52 crore in 2006-07 from Rs 35,897.96 crore in the previous year.
Home loan interest rates have risen by about two per cent in the last one year. Barring the 514 points crash on the Bombay Stock Exchange on July 27, the markets have been on an upswing.
The BSE 30-share index touched an intra-day high of
15,868.85 on July 24. It closed at a new peak of 15,794.92 points on the same day.
According to a senior LIC official, a hike in interest rates on home loans has resulted in an unexpected rise in the equated monthly instalments (EMIs). As a result, many people have deferred their plans to save in insurance policies.
Besides, the surge in stock market over the last few months has also attracted people to invest in equities and mutual funds.
During the first quarter this fiscal, single premium
collection on polices dipped more than 57 per cent at Rs 3,137.35 crore as compared to Rs 7,312.99 crore in the same period a year ago.
However, there was an upsurge in non-single individual premium policy, which fetched insurers Rs 7,631.39 crore in Q1 FY08, as against Rs 4,957.10 crore in Q1 FY07.
As per data collected by insurance regulator IRDA, industry leader LIC registered a sharp 56 per cent decline in premium collection at Rs 8,580.84 crore during the April-June quarter this fiscal from Rs 19,368.41 crore in the year ago period.
During the first quarter, insurance companies sold 82.31 lakh policies in April-June 2007 period. In June alone, 34.3 lakh policies were sold.
Private players consisting of 15 insurers recorded a 33.2 per cent growth in premium collection at Rs 3,930.95 crore as compared to Rs 2,949.83 crore.
ICICI Prudential retained the top position with an over
21 per cent rise in collection at Rs 1,056.45 crore against Rs 869.67 crore in first quarter last fiscal.