Banks have pipped individual agents in collection of retail new business premiums for the private life insurance industry in financial year 2015-16. According to data from the Insurance Regulatory and Development Authority of India (IRDAI) Annual Report 2015-16 released yesterday, banks’ share in the new business premium of private life insurers stood at 52 percent for 2015-16. Individual agents on the other hand, accounted for 32 percent share of the new premium for private insurers.
For Life Insurance Corporation of India (LIC) however, individual agents continued to account for the highest share of their new business premium. New business premium, which is a performance metric for life insurance companies refers to the premiums collected by a company in the first year of the policy. It includes both single as well as regular premiums collected. A majority of the private life insurers, including ICICI Prudential Life Insurance , SBI Life Insurance, HDFC Life Insurance, Canara HSBC OBC Life Insurance, PNB MetLife, Kotak Life Insurance, IDBI Federal Life and IndiaFirst Life Insurance have banks as promoters or part of promoter group. This has made it easier for these insurers to distribute products through the bank branches.
Further, IRDAI has also allowed banks to tie-up with up to three life, three general and three standalone health insurers for selling their insurance policies. Earlier, banks were only allowed to partner with one insurer each in these categories of business. In its annual report, IRDAI said that the share of corporate agents in the new business premium procured by the private life insurers was significant at 54.71 per cent in 2015-16 (50.72 per cent in 2014-15). This includes data for both individual retail premium and group premium. Due to this, in the same period the contribution of individual agents to the individual new business premium has declined to 68.27 percent during the year 2015-16 compared to 71.42 percent in 2014-15.(News Courtesy : MoneyControl)