Mumbai: Private insurers slowly but surely are making inroads into LIC's market share.
Riding high on Unit Linked Insurance Plans (Ulips), some 23 of them have eaten up a full 5 per cent of new premium market from LIC, taking their combined share to 30 per cent in 2014-15, according to annual data from the Life Insurance Council.
The weakened position of the state-owned Life Insurance Corporation (LIC), the market leader for decades, is mainly due to its inability to introduce new products, especially Ulips, after the Insurance Regulatory and Development Authority (IRDAI) forced its hand to withdraw many of its existing offerings.
The result: LIC saw a whopping 14 per cent decline in its new premium collection and a higher 42 per cent plunge in the number of policies during the year, pulling down its overall market share to 70 per cent from 75 per cent in 2013-14.
All the 23 private sector players closed 2014-15 with Rs 34,382 crore of premium, up from Rs 29,517 crore in 2013- 14, the data showed.
LIC, on the other hand, mopped up a premium of Rs 78,308 crore, a decline of 14 per cent against Rs 90,645 crore in FY14. Its number of policies too fell much more drastically to 2,07,1,063 during the year from 3,45,11,781 in 2013-14.
Overall, 2014-15 turned out to be a difficult year for the industry as premium income dropped 6 per cent to Rs 1,13,140 crore and the total number of policies plunged a drastic 37 per cent to 2,59,098.75 in FY15.
LIC chairman S K Roy could not be reached for comments immediately.
Some of the large private sector life insurers, however, fared well in mobilising higher premia during 2014-15.
The largest private player ICICI Pru Life's premium income surged 42 per cent to Rs 5,333.30 crore in 2014-15 from Rs 3,761.32 crore a year ago. But the number of policies the company sold fell 18 per cent to 6,39,137 in the year from 7,78,911 in FY14.
"Yes, there was a degrowth in the life insurance industry in the year gone by. Still, let me add that the last quarter of the fiscal saw a very good growth, even though the year began on a slow note," ICICI Prudential Life Insurance managing director and chief executive Sandeep Bakshi told PTI.
SBI Life grew its premium income by 9 per cent to Rs 5,528.10 crore in FY15 from Rs 5,067 crore in FY14. The life insurer also sold a larger number of policies, up 8 per cent to 11,26,211 in 2014-15.
"Our policies increased from 11 lakh to 12 lakh during the year and the premium grew to Rs 5,552 crore from Rs 5,067 crore a year ago. Our market share grew to 7.6 per cent from 6.1 per cent," SBI Life managing director and chief executive Arijit Basu said.
HDFC Life has expanded its premium income by 36 per cent to Rs 5,493 crore in 2014-15. The number of policies it sold, however, fell marginally to 8,76,781.
Bajaj Allianz Life Insurance, too, saw its new premium income rising marginally 4 per cent to Rs 2,702 crore while the number of policies it sold fell sharply by 35 per cent to 2,95,917 in 2014-15.
"Last year, our bancassurance partner Standard Chartered Bank went to another competitor through a global tie-up, so we lost almost 12-13 per cent of our business that came from the bancassurance channel," Bajaj Allianz Life managing director and chief executive Anuj Agarwal said, adding, "LIC's degrowth dragged down the overall growth of the industry."
Max Life's premium income went up 14 per cent to Rs 2,573 crore whereas the number of policies fell 7 per cent to 4,90,498 in 2014-15.
"At Max Life Insurance, our traditional product portfolio continues to do well and recorded continuous growth, along with growth in Ulips," Max Life Insurance managing director and chief executive Rajesh Sud said.
Birla Sun Life's premium income rose 14 per cent, but the number of policies it sold slid 30 per cent during the year.
Reliance Life's premium base edged up 7 per cent last year while the number of policies it sold tumbled 19 per cent.
