The sluggish economic mood has affected the life insurance industry which has grown marginally at 4.34 per cent for the first six months (April to September) 2008 with a first year premium income of Rs 34,599.37 crore as compared to a first year premium of Rs 33,159.52 crore in the first six months of 2007. The insurance industry had a growth of 14 per cent in the first quarter (April to June) of 2008-09 and a growth of 12 per cent in the first half of 2007 to 2008.
Besides Life Insurance Corporation of India (LIC), two private players- Bajaj Allianz Life Insurance and Aviva Life insurance recorded a negative growth for the first half of the current year.
The public sector behemoth (LIC) had a fall in new sales of 16 per cent with a new business premium of Rs 19,091.48 crore for April to September 2008 against a new business premium of Rs 22,761.49 crore in April to September of 2007. However LIC’s market share increased to 55 per cent in the last six months from 52.5 per cent in the April to June period of 2008.
The 20 private life insurance players which had a strong growth of 73 per cent in the first quarter of the current year have slowed down to 49.14 per cent in the first half year ended September 2008 with a new business premium of Rs 15,507.89 crore as against a new business premium of Rs 10,398.04 crore upto September 2007.
Bajaj Allianz Life registered a negative growth of 11.21 per cent with a first premium income of Rs 2,016.36 crore upto September 2008 as against a new premium income of Rs 2,271.1 crore. Similarly, Aviva Life Insurance’s new sales dropped by 12 per cent for the six month with a new premium of Rs 341.78 crore.
TR Ramachandran, CEO and MD of Aviva Life said that the fall in growth was mainly because the company lost its two major bancassurance partners — Centurion Bank of Punjab (as it merged with HDFC Bank) and Canara Bank which launched its own life insurance company.
“We are tageting a 30 per cent growth for the remaining part of the year and 50 per cent for next year. We will increase the branch network from the current 223 to 300 for this year. We are launching a child product, Ulip product offering capital guarantee and a protection product in the next 90 days. We plan to increase the agency force from 30,000 to 50,000 by the year end,” added Ramachandran.