New business acquisition for life insurance companies was never going to be the same as it was before September 2010. The premium collections have confirmed the same. Most life insurance companies have seen a drop in their business as compared to August 2010 – and that too a considerable drop.
The industry put together, saw the new business at half the levels – dropping from Rs.18,500 crores to Rs.9,613 crores. This was more or less on expected lines, in fact, it could be considered to be better than what most people feared. With low charges and insurance agent commissions being tightly regulated, the life insurance industry was expecting a worse show. The majority of the private life insurers were too focussed on selling the super-lucrative ULIP and when the new norms were announced, a lot of the insurance companies were taken by surprise.
and when the new norms were announced, a lot of the insurance companies were taken by surprise.
and when the new norms were announced, a lot of the insurance companies were taken by surprise.
Gradually we will see more focus from life insurance companies on traditional products also. So far most of the insurers had more or less shunned the traditional products and were going full-on with the sale of ULIPs only. In fact, these stringent norms were put in place because they were rampant mis-selling which forced the regulator to act in the consumer’s interest and specify strict norms on the sale of ULIPs.
The biggest drop in business was witnessed by Aegon Religare followed by Bharti Axa, Sahara, and Aviva life insurance companies.
September 2010 was the toughest month and surely the life insurance companies will bounce back with more plans and aggressive distribution techniques.
Good luck!
