LIC, leader in individual insurance but Pvt sector in group insurance
Chennai: Government owned Life Insurance Corporation of India (LIC) was far ahead of the 23-member private life insurer’s club in terms of the number of individual lives covered last month.
On the other hand, the private insurers have insured about 1.81 crore individuals under their group insurance schemes.
According to the Insurance Regulatory and Development Authority of India (IRDAI), LIC had sold 15,37,840 individual policies (84,989 individual single premium and 14,52,851 individual non-single premium policies) last month.
All the 23-private life insurers had covered 5,35,491 individuals (21,396 individual single premium policies, 514,095 individual non-single premium policies) under their individual policies.
In the case of group insurance policies LIC had covered a total of 13,68,169 lives last month while the private insurers have covered a total of about 1.81 crore.
In terms of premium income LIC’s new business premium last month was Rs 13,500.78 crore (Rs 15,548.06 crore in October 2020) while the 23-private insurers have together earned Rs 8,105.46 crore (Rs 7,227.96 crore in October 2020).
Interestingly, in the group business, last month LIC had earned a premium of Rs 8,961.13 crore covering about 13.68 lakh individuals (Rs 8,855.45 crore covering 12,39,827 lives).
On their part, the private life insurers last month earned about Rs 2,841.54 crore covering about 1.81 crore lives (Rs 3,009.7 crore for covering about Rs 1.24 crore).
It should be noted, insurance is a business of large numbers. Larger the base, better for spreading the loss of few over many.
According to a research report by Emkay Global Financial Services Ltd, the new retail policy count remained anemic for most private players barring SBI Life Insurance.
“The reinsurance price increase and tightening of underwriting processes led to lower sales of pure term life policies and this is probably one of the key reasons behind poor policy growth,” Emkay Global said.