Life insurance hits a rough patch

SRIKUMAR BONDYOPADHYAY

Calcutta, July 6: The life coverage concern in the state is fast losing its steam. The coverage premium income of life insurance companies from the gross sales of new policies in 2007-08 grew only 23.3 per cent compared with 110 per cent in the former fiscal year.

Life insurers’ income from first twelvemonth insurance premiums stood at Rs 92,988.17 crore at the end of March this twelvemonth compared with Rs 75,406.52 crore in 2006-07 and Rs 35,897.95 crore in 2005-06.

Since the gap up of the section to private participants and the introduction of market-linked merchandises envisaging better tax return than traditional plans, the first twelvemonth insurance premium income of life insurance companies have been growing over 100 per cent. A big portion of this growing came from an unprecedented rush in single insurance premium policy sales, both in the grouping and the individual segments.

However, last financial proverb a important lag in gross sales of single insurance premium policies. Person single insurance premium policy gross sales in 2007-08 grew to Rs 28,770.68 crore from Rs 23,545.99 crore in 2006-07 and Rs 10,998.99 crore in 2005-06.

A similar lag was seen at the grouping policy level, too. Group single insurance premium policy gross sales in 2007-08 were Rs 11,872.17 crore, which were less than Rs 12,422.04 crore in 2006-07. In 2005-06, grouping single insurance insurance premium policies accounted for a sum premium income of Rs 4,406.24 crore.

In individual non-single insurance premium policies, growing came from the gross sales of unit-linked programs only.

The first twelvemonth insurance premium income from the gross sales of individual unit-linked policies went up to Rs 39,454.50 crore at the end of March this twelvemonth from Rs 19,365.45 crore a twelvemonth ago and Rs 6,248.28 crore in 2005-06.

New insurance premium incomes from traditional policies, on the other hand, have got come up down to Rs 10,314.69 crore from Rs 18,544.57 crore at the end of March 2007 and Rs 13,619.27 crore in 2005-06.

Sum assured in individual regular insurance premium policies grew 17 per cent to Rs 5,54,862.39 crore from Rs 4,74,379.10 crore at the end of March 2007. The slow growing in sum of money assured is attributable to a diminution in the gross sales of individual traditional policies and riders there on.