MUMBAI: After witnessing de-growth since 2010, the life insurance industry rebounded in the first quarter of the fiscal recording a robust 20 per cent growth in new premium income.
The sector mopped up Rs 23,570 crore during the April-June period riding on group single premium policies.
The industry as a whole sold 60 per cent more group single premium policies, mopping up Rs 12,861 crore in the quarter as against Rs 8,016 crore in the same period last year.
Group single premium income contributed a whopping 54.6 per cent to the total new business for the industry.
The higher overall growth came despite the largest private sector player ICICI Prudential Life recording a negative growth.
Similarly, Reliance Life, Max Life and India First have also shown negative growth in the first year premia during the quarter.
The life insurance industry consisting of the market leader LIC and 23 private sector players mobilised Rs 23,570 crore in new premia, up 20 per cent from Rs 19,702 crore in the year ago period, as per the Life Insurance Council data.
The June quarter is usually considered a lean period, while the March quarter, the best, as salaried class normally buy policies in the last quarter to save on tax.
The higher growth was led by LIC which clipped at over 31 per cent in the quarter, mopping up over Rs 5,700 crore in new premium, while from the private sector side HDFC Life and Bajaj Allianz Life reported growth of 35 per cent and 71 per cent, respectively in new premium income.
Growth was also aided by a massive 60 per cent surge in group single policies in new sales.
However, it has recorded a negative growth in other segments like individual single, individual non-single and group non-single.
In terms of sale of policies too, the industry sold 46,44,333 in the reporting period, up 22 per cent as against 38,19,547 polices sold in the same period a year ago.
This is the first time in the past five years that the industry has reported growth in new premium business.
Industry leader LIC had witnessed a degrowth of 14 per cent in terms of new business premium in 2014-15, which also pulled down its market share to a tad over 69 per cent in the year.
While LIC earned a total premium of Rs 16,430 crore in June quarter, up 17 per cent over the year ago period, the private sector players gathered a premium of Rs 7,145 crore in the reporting period, up 26 per cent.
LIC, whose number of new policies had gone down by 40 per cent in 2014-15, sold 36,63,310 crore policies in the quarter, up 28 per cent, while the private sector insurers led by SBI Life sold 98,10,23 policies, up 3 per cent.
"We do see growth in new business premium in the range of 12-15 per cent in the current fiscal," Life Insurance Council secretary general V Manickam told PTI.
SBI Life mobilised premium of Rs 1,042 crore and sold 1,45,289 policies in the period.
"Our sales were very strong last year as well, especially in the second half of the year. Our growth in new business premium was 42 per cent and individual new business premium grew at 29 per cent in Q1," SBI Life MD and Chief Executive Arijit Basu said.
When asked whether he is confident of maintaining the robust growth rate, he answered in the affirmative.
"We managed this growth rate by activating our internal sales force and distributors, especially at the bank level," Basu said, adding both Ulip and even traditional products contributed to higher sales.