Bangalore: Total premium collection of life insurance companies dropped by 3 percent to 2,83,315 crore in 2011-12 over the previous fiscal, according to the provisional data released by Life Insurance Council.

Total premium collection was at 2,91,605 crore in FY2010-11.

The new business premium collected by the industry for FY 2011-12 declined by 9.5 percent at 1,13,678 crore from to 1,25,618 crore last year.

Linked new business saw a significant drop of 67 percent to 17,455 crore against 52,739 crore last year.

However, Non-Linked new business premium showed a growth of more than 32 percent to 96,224 crore as on March 31, 2012, compared to 72,878 crore in 2010-11.

The total assets under management (AUM) of life insurers increased by 9 percent to 16,18,544 crore as on March 31, 2012, compared to 14,82,549 crore in the previous year, despite the apparent slow-down in the industry.

"This drop in total premium can be attributed to change in regulatory road map, declining number of products and disappearance of pension business in the individual segment," Life Insurance Council Secretary General S B Mathur said.

Life Insurance Council is the industry body of life insurance companies.

If the individual pension business is considered, which forms a major segment of the new premium for Life Insurance companies, and on which policy holders have traditionally placed trust during the accumulation stage, has fallen drastically in FY'12 to a meager 1.80 percent of total new business premium, he said.

New Business Premium garnered from individual pension policies during FY12 shrunk considerably to paltry 1,139 crore compared to 19,257 crore in the previous fiscal and 26,389 crore in 2009-10.