New Delhi: Indicating tough times ahead for the private life insurers, their first-year premium, an indicator of new business growth in the sector, dipped by 15 per cent last month, although MetLife bucked the trend.
As per the latest data released by sector regulator IRDA (Insurance Regulatory and Development Authority), the life insurance industry registered a growth in their overall first year premium collection in January this year.
However, the private sector players continued with a downward trend and their first year premium dipped by 15 per cent from January 2011 levels to Rs 2,451.22 crore.
The decline in January 2012 was worse than the previous month December 2011, when the first year premium of private life insurers dipped by 8 per cent.
Private player MetLife, however, saw its first year premium grow 232 per cent in January 2012 to Rs 203.6 crore.
Helped by its better-than-peers performance, MetLife India became the fifth largest among 23 private sector life insurers in the country in January, up from its sixth position in the previous month. It was ranked 15th in April 2011.
As per IRDA data, MetLife's market share has also doubled to 3.8 per cent in the first ten months of the current fiscal (April 2011 to January 2012), from 1.9 per cent in the same period of the previous fiscal.
For the month of January 2012, MetLife commanded a share of 8.3 per cent in total new premium for private sector, up from 6.86 per cent in the previous month. This is the highest market share in a month since its inception.
The total new premium for the sector, including that of state-run LIC, stood at Rs 9,543 crore in January 2012, up 15 per cent from Rs 8,301 crore in the same month last year.
LIC's new business grew by 31 per cent last month, while its market shares rose to 74 per cent from 65 per cent in January 2011.
The business conditions have not been very encouraging in the insurance sector in the recent past and the IRDA Chairman J Harinarayan said earlier this month that the sector would see a de-growth of 13-14 per cent this fiscal.
The first year premium of life insurers declined by 17 per cent to Rs 71,952 crore as on December 31, 2011 in the current fiscal, down from Rs 86,697 crier in the year-ago period.
The decline in the business of private insurers was higher at 20 per cent compared to the state-owned insurer, Life Insurance Corporation of India, which suffered a 15 per cent dip in the first-year premium.
Bank of America Merrill Lynch said in a recent report that the top-line growth of the Indian insurance industry has already taken a big hit after the new regulations.