When buying a life insurance policy, you aim to secure the future of your w...
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 commission being tightly regulated, the life insurance industry was expecting a worse show. 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.
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 was going full on with sale of ULIPs only. In fact these stringent norms were put in place because they was rampant mis-selling which forced the regulator to act in the consumer’s interest and specify strict norms on sale of ULIPs.
September 2010 was the toughest months and surely the life insurance companies will bounce back with more plans and aggressive distribution techniques.