Private insurers slowly but surely are making inroads into LIC's market share. Riding high on Unit Linked Insurance Plans (Ulips), some 23 of them have eaten up a full 5 percent of new premium market from LIC, taking their combined share to 30 percent in 2014-15, according to annual data from the Life Insurance Council.
The weakened position of the state-owned Life Insurance Corporation (LIC), the market leader for decades, is mainly due to its inability to introduce new products, especially Ulips, after the Insurance Regulatory and Development Authority (IRDAI) forced its hand to withdraw many of its existing offerings.
The result: LIC saw a whopping 14 percent decline in its new premium collection and a higher 42 percent plunge in the number of policies during the year, pulling down its overall market share to 70 percent from 75 percent in 2013-14.
All the 23 private sector players closed 2014-15 with Rs 34,382 crore of premium, up from Rs 29,517 crore in 2013- 14, the data showed. LIC, on the other hand, mopped up a premium of Rs 78,308 crore, a decline of 14 per cent against Rs 90,645 crore in FY14.
Its number of policies too fell much more drastically to 2,07,1,063 during the year from 3,45,11,781 in 2013-14. Overall, 2014-15 turned out to be a difficult year for the industry as premium income dropped 6 percent to Rs 1,13,140 crore and the total number of policies plunged a drastic 37 percent to 2,59,098.75 in FY15.
LIC chairman S K Roy could not be reached for comments immediately.
Some of the large private sector life insurers, however, fared well in mobilising higher premia during 2014-15. The largest private player ICICI Pru Life's premium income surged 42 per cent to Rs 5,333.30 crore in 2014-15 from Rs 3,761.32 crore a year ago. But the number of policies the company sold fell 18 per cent to 6,39,137 in the year from 7,78,911 in FY14.