Even though it has retained its leadership position in the total business segment, Life Insurance Corporation has de-grown almost 25% in the group business during the first half of the current financial year.
The decline comes at a time when group business of the private insurers in the first half has grown by 14% against the same period last year. A sharp decline in the group business has pulled down LIC?s total premium collection by 4% during the first half of the year.
According to Irda figure, total premium for LIC in April-September period has come down to Rs 35,342 crore from Rs 36,721 crore for the corresponding period in the last financial year. Group insurance business of the insurer has been hit hard in the first half of the current financial year and has come down to R16,016 crore against Rs 21,303.4 crore during the first half of the last fiscal.
Group insurance business for the private insurers has increased by 14% to Rs 4,057.41 crore in the April-Septemberperiod against R3,560.60 crore in the same period last year.
An LIC official said on the condition of anonymity, ?Superannuation has been one of the biggest growth drivers so far and will continue to remain so. The decline in group business is a cause of concern but we will be able to tackle that.?
President and executive director of Reliance Life Insurance Malay Ghosh said, ?Group insurance is a fund-based business and the business volumes are sporadic in nature. The premium is dependent on the Retiral Benefits Corpus between Superannuation and Gratuity. In some cases, it could be a movement from one insurer to another, so it is somewhat difficult to establish the exact growth figure from year-to-year.?
Karni Singh Arha, chief financial officer of the India First Life Insurance, feels there has been a gradual decline in retail business? share and companies have changed their strategies. ?Private players have been pursuing the business generating from large institutions like PSUs. Such activities have started showing results,? he said.
Meanwhile, LIC has continued to grow in the individual business. Its individual business premium in the first half of the year has increased by 25.3% to R19,325.52 crore from R15,417.99 crore for the similar period the previous fiscal.
Monish Shah, senior director of Deloitte in India said, ?The change in the relative market shares in specific product segments is more a reflection of player wise tactical changes and realignment of the market structure and products. Several players have made significant investments in realigning their business models to the industry dynamics??
The insurers feel although the market will continue to remain ?choppy?, it is likely to improve ?slightly? in the next six months. ?In the second half, we are hoping with slight revival in market sentiment, the individual retail volumes will also improve which is key for the long-term sustainability of business,? Reliance Life?s Ghosh said. India First Life Insurance?s Arha feels more or less similar trend can be seen in next six months while the market will continue to remain ?choppy?.