Premium Income of LIC Goes Down By 19 Percent

By SiliconIndia   |   Wednesday, 28 December 2011, 12:57 Hrs
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Premium Income of LIC Goes Down By 19 Percent


Bangalore: The stock market crash situation has distorted the future of life insurance companies, making it harder for the LIC players to survive in the economic market. The premium income value of LIC Companies has declined as policy issuance by cos. goes down in the current financial year.



Within a period of April-Nov this year, there is a decline in the premium collection of Life Insurance Companies by 19 percent which amounted to 62,429 Crore incurred by selling new policies in the first eight months of the financial year compared to the previous year which was 76, 989 Crore. Private sector companies dropped down by 22.37 percent to 16, 669 Crore while the state-owned Life Insurance Corporation dropped by 7.57 percent to 45, 758 Crore.



Individual and Non-single premium income went down by 58 percent and 17 percent. However, compared to last year i.e. in 2010, during the period of April-November, 2011, there was a consistent increase in group single premium by 33 percent.



It has been more than a year that sales in insurance policies are going down owing to the inflationary market and because of the fact that options and premium features for unit-linked equity products have been altered. While for previous years, the first three months-January, February and March saw an increase of 40 percent of the premium value for the life insurance industry.



There is a renewed interest of insurance companies to prioritize traditional insurance products and introduce new products targeted towards increased sales and improved profit margin. However, growing concerns continue to reign regarding the stability of life insurance industry which is expected to remain unresponsive even in the upcoming 6 to 12 months by industry analysts.



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