Life insurers see a rebound in growth

Overall improvement in the macro-economic scenario has led to a rebound in growth for life insurers this fiscal so far, showed data released by the insurance regulator.

The individual business premium collection for the industry grew 14 per cent to ₹10,087.2 crore as of June, 2014, against ₹8,839.9 crore in the year-ago period, according to Insurance Regulatory and Development Authority data.

The life insurance industry has been reeling under a slowdown in individual new business premium collection for the last couple of years due to a series of regulatory changes and slowing growth in the economy.

Vibha Padalkar, ED and CFO of HDFC Life, said her company has seen a revival in new business premium collection growth this year.

In the previous fiscal, the company saw de-growth as it undertook a series of quality control measures such as concurrent audits and verification calls.

Padalkar said: “This year, due to improvement in the economic environment and sustained rally in the equity market, we have also seen inflows in unit-linked products. Last year, we saw net outflows from equities. I expect big life insurance players to continue to grow faster than the industry due to their wider distribution base.”

The state-owned life insurance giant Life Insurance Corporation saw a 13.4 per cent increase in individual new business premium collection at ₹6,795.14 crore as of June 2014.

Private life insurers too notched up good numbers. While HDFC Life’s new business premium collections stood at ₹810.40 crore as of June, 2014, up 38.6 per cent year-on-year; ICICI Prudential Life Insurance mopped up ₹782.21 crore during the period, up 38.4 per cent y-o-y and Max Life ₹465.69 crore, up 21.5 per cent y-o-y.

Sandeep Batra, ED of ICICI Prudential Life Insurance, said improved product proposition post-regulatory changes that came into effect from January 2014 and a positive macro-economic environment have led to an increase in the contribution towards financial savings and, in turn, towards life insurance.

Prashant Tripathy, Senior Director and CFO, Max Life Insurance, said he expects the growth trend to continue during the year aided by announcements in the Budget, such as increase in Section 80C limit from ₹1 lakh to ₹1.5 lakh, and marginal increase in personal income tax exemption slab from ₹2 lakh to ₹2.5 lakh.

“These measures will allow more money in the hands of the customer, which is a positive development for long-term savings instruments, including life insurance,” said Tripathi.