Reflecting an unsteady trend, the Indian life insurance, which has grown its fresh premium by 14 per cent in 2016-17, has witnessed an increase of more than12 per cent in surrenders/withdrawals of policies during the year.
According the latest annual report by the IRDAI, the benefits paid during 2016-17 on account of surrenders / withdrawals increased by more than 12 per cent and stood at Rs 90005.41 crore, of which the state owned Life Insurance Corporation accounted for Rs 44924.56 crore and private sector Rs 45080.85 crore.The comparative previous year statistics were Rs 80333.74 crore, of which LIC accounted for Rs 37504.33 crore and private sector paid Rs 42829.41crore.
In the reporting year, in case of LIC, out of Rs 44924.56 crore surrenders, ULIP policies accounted for Rs 11094.51 crore (24.70 percent) as against Rs 8960.97 crore, (23.89 percent) in 2015-16.In case of the private insurance industry, the ULIP surrenders accounted for `40241.57 crore (89.27 percent) in 2016-17 as against Rs 37379.49 crore (87.31 percent) in 2015-16.
The life industry paid benefits of Rs 236339.87 crore in 2016-17 (Rs 204453.50 crore in 2015-16) which constitutes 56.48 percent of the gross premium underwritten (55.72 percent in 2015-16).The benefits paid by private insurers was Rs 69463.00 crore (Rs 61555.37 crore in 2015-16) constituting 58.87 percent of the premium underwritten (61.25 percent in 2015-16).
LIC paid benefits of Rs 166876.88 crore in 2016-17, constituting 55.53 percent of the premium underwritten (Rs 142898.13 crore in 2015-16, 53.63 percent of the premium underwritten).
Life insurance industry, including the renewals, recorded a premium income of Rs 4,18.476.62 crore during 2016-17 as against Rs 3,66.943.23 crore in the previous financial year, registering a growth of 14.04 percent (11.84 percent growth in previous year). While private sector insurers posted 17.40 percent growth (13.64 percent growth in previous year) in their premium income.LIC recorded 12.78 percent growth (11.17 percent growth in previous year).
While renewal premium accounted for 58.13 percent (62.18 percent in 2015-16) of the total premium received by the life insurers, first year premium contributed the remaining 41.87 percent (37.82 percent in 2015-16).
During 2016-17, the growth in renewal premium was 6.62 percent (6.24 percent in 2015-16). First Year premium registered a growth of 26.26 percent in comparison to a growth of 22.44 percent during 2015-16.
Further bifurcation of the first year premium indicates that single premium income received by the life insurers recorded growth of 31.82 percent during 2016-17 (32.52 percent growth in 2015-16).Single premium products continue to play a major role for LIC as they contributed 32.71 percent of LIC’s total premium income (27.80 percent in 2015-16).
In comparison, the contribution of single premium income in total premium income during 2016-17 was 14.89 percent for private insurance companies (13.75 percent in 2015-16).The regular premium registered 16.64 percent growth in 2016-17, as against 8.23 percent growth in 2015-16.The private insurers registered a growth of 22.17 percent (13.18 percent growth in 2015-16).