Country’s largest insurer, Life Insurance Corporation of India (LIC) is seeing a decline in new business premium. One of the main reasons behind declining sales is shrinking product portfolio of the insurer.
Insurance behemoth had 54 products in the market till December 2013, which had come down to mere 10 since January
The Insurance Regulatory and Development Authority (IRDA) has mandated sale of insurance products based on new product guidelines from first January 2014. IRDA has also directed insurers not to sell those policies, which are based on old guidelines. And therefore, insurers were compelled to restructure their product portfolio. Hence, insurers had to re-design their products according to new guidelines and get them approved by IRDA before launching them in the market. As a result product suite of most insurers has narrowed since the beginning of this calendar year.ry 2014.
LIC said that sales were also affected due to rise in premium amounts as service tax has now been levied on policyholders.
However, LIC is confident that sales will pick up in the second half of this financial year as more products will be available in the market by then.