Life insurance industry touched Rs 4.60 lakh crore premium with shocking 1413% growth in ULIPs
Recently Insurology has published a news about the prediction of 12-15% growth trend of Life Insurance in India. And after the IRDAI annual report has been published, it confirms about our prediction with a shocking 1412% growth rate in ULIP’s.
India’s life insurance industry hit a record high by collecting Rs 4.58 lakh crore in premium for 2017-18 – a 10% increase over the previous financial year. Life insurance density — calculated by dividing the total insurance premium by the population — increased to $55 in 2017-18 from $46.50 in 2016-17, said IRDAI in its annual report. Life insurance penetration (premium as a % of GDP) has increased to 2.76% in 2017-18 from 2.46%.
The life insurance growth is because of 23 private sectors which saw growth accelerate to 19.15% from 17.40% in 2016-17. Government-owned LIC, however, saw growth dip to 5.90% from 12.78%. This resulted in LIC’s reduction in market share to 69.36% from 71.81%. While private players share increased to 30.64% from 28.19%. LIC’s total premium for the year was Rs 318 lakh crore versus Rs 1.40 lakh crore for private companies.
Read of the day: https://insurology.in/breaking-down-the-insurtech-in-india/
The growth trend of LIC
Life Insurance Corporation(LIC) however, grew its market share in terms of the number of policies sold. Clearly Implying that LIC sold more affordable products than private companies. Of the 281.97 lath new individual policies sold in FY18, 213.38 lakh policies (75.7% ) were issued by LIC and 68.59 lakh (24.3%) by private insurers. LIC showed better performance in persistence and in single-premium policies sales. LIC’s income from renewal premium for 2017-17 was Rs 1.83 lakh crore.
When it came to new business premium, LIC collected Rs 1.83 lakh crore, compared to private players booking Rs 81,104 crore. This is largely on the back of selling a large number of single premium policies. “Further bifurcation of new business premium indicates — single premium products continue to play a major role for LIC as they contributed 33.48% of LIC’s total premium income (vs 32.71% the previous year).
In comparison, the contribution of single premium income in total premium income during 2017-18 was 15.58% for private insurance companies. When it came to first year premiums — a measure of the number of regular policies sold, excluding single-premium policies — LIC fared poorly (Rs 28,146 crore) compared to the private sector (Rs 37,581 crore).
Shocking 1413% growth rate in ULIPS
Another shift in 2017-18 — possibly boosted by Sensex and Nifty touching highs –was the increase in sale of ULIPs. ULIPs Share of in total premium increased to 1413% in 2017-18 as against 12.63% in 2016-17. ULIPs registered a 23% growth to Rs 64,851 crore from Rs 52,845 crore, while traditional products compared to ULIP grew at a slower pace of 7.75% to Rs 3.93 lakh crore from Rs 3.65 lakh crore.
Hence, we can say that Life Insurance is set to reach top heights in India.
Source : Times Of India
Insurology top read of the month: https://insurology.in/money-back-policy-policy-that-regularly-pays-you/,