New business income for life insurance companies down 17%: IRDA

Sales of life insurance policies continue to decline even during the tax-saving season. According to the data released by the Insurance Regulatory and Development Authority, or Irda, new business premium income for life insurance has fallen by 17% to Rs 71,953 crore during April-December, 2011, from Rs 86,698 crore a year ago.

While private sector saw a drop of 20.34% in income from sales of new policies during the first nine months, state-run Life Insurance Corporation registered a 15.86% fall. Large private insurers like SBI Life and ICICI Prudential witnessed a drop of 19.82% and 33%, respectively.

Industry experts blame non-availability of pension products, curbs on guaranteed products and delay in product approvals for the drop in income from insurance. The only private sector insurer to register an increase in income was MetLife.

The company recently sold its stake to the second-largest public sector lender Punjab National Bank. It has done a business of Rs 150 crore through the bank. The company has applied to the insurance regulator for approval of the deal. The regulator is reviewing the proposal and is likely to announce the deal in a month.

The volatility in the market has also acted as a deterrent for the sales of policies, especially Ulips.

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