|S.B. Mainak in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury
Calcutta, June 10: The Life Insurance Corporation of India may find it difficult to improve its first year premium collection on account of a reduced product portfolio and issues related to the sale of new products.
The Insurance Regulatory and Development Authority (IRDA) had ordered the discontinuation of the sale of life insurance products, which do not comply with its revised guidelines, from January 1. As a result, all insurance companies had to rework their product portfolio.
The LIC is left with around 12 compliant insurance products, down from 54 last year.
The insurer’s first year premium collection has also declined to Rs 14,769.53 crore in March from Rs 15,450.18 crore a year ago.
LIC managing director S.B. Mainak today said the new products were yet to get acceptance in the market. “Field agents are finding it difficult to sell new products,” Mainak said at a seminar of the Bengal Chamber of Commerce and Industry here today. He added that the addition of service tax on premium was one of the key reasons for lower sales.
He, however, expects the IRDA to give speedy approval to its new products that may push up premium collection during the second half of this fiscal. “We need to take a relook at our marketing strategy for selling new products. It takes time to develop products. We are expecting approval for some products shortly.”
He said the sale of group insurance policy had gained traction in 2013-14 and was expected to grow in this financial year as well. “Public is willing to take insurance coverage as a group. State government also plays a key role in identifying and selling such type of products,” Mainak said.
According to IRDA data, the growth in total group insurance policies in 2013-14 was around 51 per cent over the previous year.