Big private life insurers see drop in renewal premium
Feb 26 2013 , FC Research Bureau
However, public sector insurer Life Insurance Corporation of India (LIC) managed to collect Rs 26,925 crore in the December quarter of FY13, compared with Rs 24,001 crore in the same quarter previous year, registering a growth of 12.2 per cent.
Over the longer-term period, too, renewal premium collection for large private life insurers has declined by 9.2 per cent in April–December 2012 period over the same period in 2011. While these insurers collected Rs 21,380 crore during the nine-month period of April – December 2012, collections stood at Rs 23,536 crore in corresponding periods previous year.
Meanwhile, LIC registered a growth of 5.5 per cent with collection of Rs 79,310 crore in April–December 2012 period, against Rs 75,193 crore in the same period of 2011.
The private insurers that were considered for the analysis are ICICI Prudential Life Insurance, HDFC Standard Life Insurance, SBI Life Insurance, Max Life Insurance, Bajaj Allianz Life Insurance and Reliance Life Insurance.
“Insurers have to focus on renewals right from the time of selling the insurance plan as a policyholder who has been sold the wrong or unsuitable product would always be reluctant to pay the renewal premium next year,” Anisha Motwani, director and chief marketing officer of Max Life Insurance.
The analysis revealed only two out of six private insurers managed to show growth in renewal premium collection. HDFC Standard Life collected Rs 4,461 crore till December 2012, compared with Rs 4,197 crore in same period previous year, registering a growth of 6.3 per cent. Max Life collected Rs 3,276 crore in April–December 2012 period, against Rs 3,188 crore during same period last year, witnessing a growth of 2.8 per cent.
Reliance Life Insurance witnessed a decline of 24.5 per cent with collection of Rs 1,854 crore in April–December 2012 period, against Rs 2,457 crore during same period last year. Bajaj Allianz Life collected renewal premium of Rs 2,508 crore till December 2012, compared with Rs 3,145 crore till December 2011, registering a decline of 20.3 per cent. Renewal premium for SBI Life dipped by 19.1 per cent, as collections stood at Rs 3,326 crore till December 2012, against Rs 4,111 crore till December 2011.