The market share of Life Insurance Corporation of India declined for the seventh straight month in July as private peers gained at its expense.
India's largest life insurer lost 4.5 percent of its share to 69.5 percent in terms of new business premiums collected as of July compared to the year-ago period, according to data compiled by the Insurance Regulatory and Development Authority of India.
“Private players have shown significant growth in individual single and regular premium policies as more unit-linked plans were sold,” said Anirudh Jain, business director and head-insurance at Centrum Research. “The buoyancy in the stock market has improved the perception for unit-linked plans, which coupled with tax benefits, led to a win-win scenario for both customers and insurers.”
Single-premium policies surged 56 percent in July. But the premium collected by LIC, which owns three-fourths of the market for such products, declined 6 percent during the month, according to IRDAI data.
Regular-premium policies, too, rose about 6 percent for both LIC and private players. These policies contributed more than half the premium collected by private insurers.
“That's because the regular-premium unit-linked plans are akin to systematic investment plans offered by mutual funds and more clients are now buying such policies,” said Jain.
Brokerage firm Motilal Oswal, in its Aug. 12 note, had said it expects growth for private life insurers to come at 16 percent in the ongoing financial year, further driving up their market share.
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