Why the New Business Premium growth in Life Insurance Industry has slowed down in 2017-18?
There is no slowdown in New Business growth and the industry is registering growth over growth.
In fact in terms of New Business Premium, Life Insurance Industry has been registering an impressive double-digit growth for past 3 years. However, in terms of number of policies, we have been able to register a single-digit growth.
The total New Business Premium underwritten by the industry till 31st March 2018 was Rs.1, 93,865 crore as compared to Rs. 1, 74,675 crore last year.
To give you a perspective, the industry had sold around 4 crore New Business policies till FY 2013-14. However due to changes in consumer behaviour and revamped New Product Regulations etc. the number of new policies have shown a reducing trend but the ticket size is increasing considerably.
We have been selling more than 2.5 crore policies every year in the past 3 years.In FY 2017-18 the industry sold more than 2.8 crore policies as on 31st March, 2018.
What is the ratio between ULIP to non-ULIP?
In terms of New Business premium, the percentage share of Ulip is around 14% for the period ended 31st March 2018.
Is it possible to provide data as to how much health insurance business of life insurers are growing and how much premium they have mobilized in 2017-18?
Health as a segment contributes less significantly in life insurance business. Till 31st March 2018 the health insurance segment contributed only Rs 216 crore to the total New Business premium collected.
How much pension business life insurance has done?
New Business under Pension segment (both individual and Group) was around Rs 52,000 crore (Provisional) as on 31st March, 2018.
How much is Bancassurance premium mobilisation during the year?
Of the total new business premium, approximately 13 per cent business is underwritten through Bancassurance channel.
What kind of growth you are expecting in 2918-19?
We do believe that the double digit growth for the industry in terms of New Business Premium will continue for the current fiscal too. Life insurers are working relentlessly to achieve sustainable growth on account of increase in household savings through our industry.
Has the agency force grown?
It has remained stagnant for the past three years. Total number of agents in the industry was at 20.82 lakh during the year gone by from 20.88 lakh in the previous fiscal.
How many companies are profitable in 2017-18? Have the profitability grown?
18 out of 24 companies are profitable in life insurance space in 2017-18. Yes, the profitability has grown keeping in view the facts like increase in premium, increase in investment income and reduction in management expenses.
Have the expense ratios of companies fallen?
Yes, it has come down due to the combined efforts of the regulator, companies and all the stakeholders.
Have the life insurers opened new offices and recruited new people?
As on 31st March 2018, the total number of branches of life insurers was 11,111. However new branches are getting opened and hiring is happening. Life insurers are recruiting people from institutes like IIRM (Hyderabad), NIA (Pune) and through open competition.Total direct employment in the industry was 2.65 lakh now as compared to 2.49 lakh in last fiscal. Also there are 10 intermediaries involved in life insurance selling and they also add human resources to the sector, thus providing indirect employment.
Has the industry been able to retain customers?
Yes. In-force policies continue to be at around 33 crore for past 5 years in the industry despite spike in number of policy payouts.
What is the experience of death claim settlement ratio of Industry?
There are 2 categories of death claim. One is individual death claim and another is group death claim.
For year ended 31st March 2017, 97.74% of individual death claims and 99.31% of group death claim were settled.
With regard to the pending claims, I wish to inform that 0.47% of individual and 0.26% of group death claim relates outstanding and the balance being repudiated or rejected claims.
How much the industry's investment portfolio has gone up?
Every year investment portfolio of the life insurance companies are growing around Rs 3lakh crore.
As on 31st March 2018, it was around Rs 32 lakh crore (Provisional). Out of it, Rs 25.3 lakh crore (Provisional) relating to Public sector insurer and the remaining Rs 6.6 lakh crore (Provisional) pertaining to all the private sector life insurance companies.
The total investment in Central & State Government Securities being Rs. 19.42 lakh crore (Provisional) which constitute more than 60% of investments which is 10 % over the mandatory investment norms set by IRDAI.
Infrastructure Investment, Housing and Loans to State Govts. for Housing etc is Rs 3.84 lakh crore (Provisional).Approved Investments such as equity and corporate bonds etc being Rs7.58 lakh crore (Provisional) and other investments are more than Rs1.06 lakh crore (Provisional).The total AUM is around Rs. 32 lakh crore (Provisional).
How much industry's AUM has gone up in FY 2017-18?
The AUM of the industry has gone up by Rs.3.3 lakh crore during FY 2017-18.
The total asset of the industry is currently around Rs 34 lakh crore (Provisional) and the AUM is around Rs.32 lakh crore (Provisional).
How much life insurers have invested in housing, loans to State Govt for housing?
As on 31st March 2018, life insurers have invested more than Rs. 3.84 lakh crore (Provisional) in housing, loans to State Govt for housing etc. projects and FFE.
What is the gross NPA of the industry? Whether it has gone up from last year?
In the life insurance industry the non performing assets (NPA) in Previous Financial year was around Rs18,000 (Provisional). In FY 2017-18 the same is around Rs 22,700 crore (Provisional).There are several factors involved with regard to increase in NPA’s. The corporate’s while availing corporate debt would have factored and projected as if the present condition will prevail in the future too and on that basis they would have availed the debt.
Subsequently there may be changes on account of politico-socio and economic conditions resulting in demand and supply mis-match leading to declining in revenue without corresponding decline in other parameters.
In the absence of requisite revenue flow, servicing of the debt gets severely affected leading to delay and default in debt servicing which results NPA’s.
What was the additional capital brought in by life insurers after the FDI limit was increased from 26 % to 49%?
Post the increase in FDI limits, the Indian life insurance sector has attracted approximately Rs 14,000 crore as FDI.
Why no new player is joining the industry for quite some time?
It may be commercial call of the investors. No new player has joined the industry for the past seven years, which may be due to long gestation period, which the life insurance companies are facing in India and the promoters and joint venture(JV)partners may be reluctant to wait for long period.
Govt wants all life insurers sell more PM Jeevan Joyti Bima policies. Is it possible? How much they have sold during the year?
Yes, it is possible to sell more policies given the large number of insurable population in India, provided the premium under PMJJBY scheme is increased from currently Rs 330 to Rs. 450 for a sum assured of Rs 2 lakh.
The claim payout is higher than the premium received under the scheme and at present the PMJJBY Scheme is not viable for the life insurers and hence we have represented to GoI for consideration of higher premium per life assured under the scheme.
We are confident that GoI may consider our plea positively and thereby the deprived social security to Indians may be addressed, besides increasing the insurance penetration in India.
Approximately 3 crore policies were sold by the life insurers under the scheme during 2017-18. To elaborate it, we have been able to sell around 5.33 core policies under PMJJBY scheme during last couple of years.
Are the other private sector life insurers participating in PMJJBY schemes?
9 out of 24 companies are offering the PMJJBY scheme out of which 8 are private players.
Do life insurers have a role in NHPS?
Yes, they can join as a distributor as we have more than 20 lakh field personnel and other intermediaries who can take the scheme across the country and make it much more successful.
What are the regulatory concerns for the life insurance industry?
Regulatory concerns are addressed periodically by the Regulators, as Life Insurance Council plays a pivotal role in getting the regulatory issues resolved.However, we have taxation issues pertaining to GST where we have not received a benign rate as obtained in majority of the countries across the globe. Beside the above we have issues relating to Direct Taxation wherein we are seeking a separate window under sec 80C of the Income Tax Act, for the insurance premium paid as similar tax window is available for other financial products in India.
I am confident that the Insurance Regulator and Life Insurance Council will work in unison to address the above issue for the betterment of the industry.
How do you see industry in 2025?
I do not want to speculate, but I am confident that with the booming economy and with the support of the Government, Regulator and other stakeholders, the industry will be double the size of what it is currently.
Amongst BFSI sector, Insurance is emerging as a very significant player. I am sure not only this decade but also future decade too belongs to insurance sector in India.