Life insurers see 3.5% growth in FPI

KOLKATA: The period from January to March every year, is considered heavy selling months for the life insurance sector and companies that lag behind during the initial period of any fiscal, have always been depending on this period to catch up with their targets for the fiscal. Insurance sale goes up since almost every individual embarks on their tax planning during these three months. 

This has possibly helped the sector register a positive growth figure in first premium income (FPI) for the period April to January 2009, after reporting a fall in FPI during April-December 2008. 

Data released by the Insurance Regulatory Development Authority (Irda) for January 2009 revealed that the life cover sector managed a 3.5% growth in first year premium during April 2008 to January 2009 vis-à-vis a 2.39% fall during April-December 2008. 

FPI refers to the first premium paid by an individual while buying a life cover. It also includes single premium policies, where an individual pays a premium only once. 

Total premium income for January 2009 stood at Rs 13,043 crore (Rs 9,551 crore) while for the period April 2008 to January 2009 it was Rs 65,337 crore (Rs 63,128 crore). 

Overall growth for the period may have been positive, but the private sector showed a fall in growth rate for FPI to 13% in April 2008 to January 2009 against 20% during April-December 2008. Life Insurance Corporation (LIC), on other hand managed to almost arrest its 15% fall in FPI income during April-December 2008 to 2% during April 2008 to January 2009. 

Interestingly, the private companies registered a 24% fall in FPI income during January 2009, while LIC witnessed a 72.53% growth in FPI. Sale of individual single premium policies, which rose 198% in January 2009, saved the day for LIC. This has, in fact, pushed up the growth rate for the segment in the entire life insurance sector by about 168%. 

In contrast, private insurers saw FPI decline for almost all categories of products except group policies. Individual single premium policies saw a 44% fall followed by group single premium policies at 37% and individual non-single premium policies at 25%. 

Individual non-single premium policies for the entire life insurance industry saw a 32% fall in premium income during January 2009, while for the period April-January 2009, the fall was 9%

Source:Economictimes