While the third quarter of the country’s biggest insurance company, Life Insurance Corporation of India, is likely to see a dent in premium collection after the new guidelines for Ulips come into place from September 1, the insurance behemoth will find it difficult to meet first premium income target of Rs 54,000 crore for 2010-11.
With the new guidelines of the Insurance Regulatory and Development Authority (Irda) in place, the Ulip basket has become small for insurance companies in India. LIC has introduced Pension Plus just a day ago. While customers will be able to choose from brand new products, the initial few months will be tough for the insurance company.
To compensate the expected dip in the first premium income, the corporation has already sold more than a crore policies from April to August 14 this fiscal. First premium income of LIC has increased by 96% to Rs 15,917 crore till August 14 of 2010-11. With almost 70% of its revenue generating from Ulip plans,LIC will find it difficult to bridge the gap with a single unit-linked product apart from a bunch of traditional ones.
The Insurance major has recently closed a few profit earning Ulips like Market Plus, Future plus, Jeevan Saral Plus, Wealth Plus and Money Plus. Instead, it will now concentrate more on traditional plans like Jeevan Akshay, Jeevan Anand, Jeevan Saral, Jeevan Tarang and Beema Bachat.
?New business from unit-linked policies may get affected during the quarter as we will not have many products to offer. We will stress more on the offtake of traditional products during the quarter,? said RR Dash, zonal manager (east) of LIC.
While it garnered a total premium income of Rs 1,85,986 crore during 2009-10, the corporation has set a target to grow its first premium income by 25% this fiscal.