After a dismal first quarter, Life Insurance Corp. of India (LIC) clocked a sharp 40% month-on-month development in particular person premiums in July and August, led by a jump in the gross sales of big-ticket pension and time period assurance plans.
LIC witnessed unfavorable development in new enterprise in the primary quarter as its brokers couldn’t meet prospects because of the lockdown restrictions. Given persevering with curbs, LIC has shifted focus to fewer however larger insurance policies, that are being offered at 50% larger measurement than in the final fiscal yr, managing director Vipin Anand mentioned in an interview. With belongings of greater than ₹34 trillion, LIC is India’s largest life insurer.
“Apart from excessive net-worth people (HNIs) who’re shopping for big-ticket insurance policies, prospects belonging to the center class too are actually shopping for insurance policies with ₹12-15 lakh sum assured, which was earlier at round ₹7-10 lakh,” Anand mentioned, including even individuals near retirement are shopping for massive pension merchandise to make sure long-term rates of interest are protected in order that they get enough returns at maturity.
Concerns over longevity and future incomes capability in the wake of covid are prompting individuals to purchase big-ticket time period assurance and pension merchandise.
“Uncertainty of life as a consequence of covid has spur-red the demand for insurance coverage merchandise and quick falling rates of interest for fixed-return annuities,” he mentioned. People aged 50-70 are shopping for massive annuities to freeze returns earlier than rates of interest fall additional.
“The public’s newfound curiosity in pure safety merchandise has considerably improved gross sales in our time period merchandise, offline Jeevan Amar and on-line Tech Term, particularly now that non-public firms have elevated their time period insurance coverage premiums and our merchandise are comparatively higher priced,” he mentioned.
During July, LIC’s new enterprise particular person single premium was 68.59% larger at ₹3,305.95 crore in opposition to ₹1,961 crore in July 2019.
Between April and July, this grew by 13.47% to ₹6,961.19 crore as in opposition to ₹6,134.96 crore throughout the identical interval of final yr. LIC’s general new enterprise premium in the course of the April-July interval was barely decrease at ₹15,170.95 crore as in comparison with ₹15,311.87 crore a yr in the past.
LIC expects to garner new enterprise premium price ₹18,800 crore for August, which is about 10% larger than in August 2019.
Given continued motion curbs and the necessity for social distancing, LIC—which relies upon largely on brokers—witnessed a drop in its new enterprise premium in the vary of 13-32% throughout April, May and June.
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