The life insurance sector witnessed a marginal 1.7% decline in the first-year premium during the first half of 2014-15. The first-year premium collection dropped to Rs 49,178 crore from Rs 50,056 crore during the same period in the previous year. In absolute terms, LIC was the biggest loser, with its first-year premium income dropping by Rs 2,073 crore or 5.5% (see table). LIC’s market share in the first year pie has dropped from 75.3% in 2013-14 to 72.8% in the first half of 2014-15.
One of the reasons for this is the public sector insurer’s overdependence on long-time favourite policies and its failure to launch a Ulip after the 2010 guidelines
While private insurers have launched Ulips that comply with the new rules, LIC still doesn’t have one. LIC Chairman S K Roy says the public-sector insurer may launch a Ulip by March 2015. The company has also been hit because its best-selling traditional policies were replaced after the new regulations came into effect