Page 14 - Insurance Times May 2019

Private Life Insurance

News

First-year premium of life Insurers bearing the burden of low-premium life cover

insurers up 11% in FY19 PMJJBY
The first-year premium of life insur- The low-premium life cover scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana
ers increased (PMJJBY), is becoming a 'white elephant' for
by 10.73 per insurers as losses under this scheme are un-
cent to Rs. derstood to have increased in the just-con-
2,14,6 73 cluded financial year.
crore in FY19 The PMJJBY losses are believed to have gone
from Rs. up over 20 per cent for many insurers in the
1,93,866 crore in FY18. An analysis financial year ended March 31, 2019, impact-
of data released by IRDAI shows that ing their profitability.
growth in FY19 was driven by a 39
"Though private players are also selling it, it is a loss-making portfolio for many.
per cent increase in group non-
The industry has requested the government for enhancement of premium from
single premium. LIC registered 5.68
per cent growth in premium at Rs. present Rs. 330 to around Rs. 440 or so," RM Vishakha, Managing Director and
1,42,192 crore (Rs. 1,34,552). Chief Executive Officer, India First Life Insurance Company Ltd, told.
"While the life cover is always good, it is populism which is the main problem
The total first-year premium of 23 pri-
with an otherwise good scheme. The issue is anyone can subscribe for it even
vate life insurers went up by 22.2 per
though they can afford to pay a reasonable and workable premium," said the
cent to Rs. 72,481 crore. While LIC
enjoyed a market share of 66.24 per Chief Financial Officer of a top insurer.
cent, its private sector peers' market If there is no intervention, the losses will further mount, say insurers as both
share stood at 33.76 per cent. gross enrolment as well as total claims have been going up significantly.

"The year was challenging indeed, "As per the provisional estimates, there has been a significant increase in en-
with many headwinds such as mar- rolment as well as claims in the year that ended March 31, 2019 and loss could
kets not doing quite well. Things escalate beyond 20 per cent," said the CFO.
picked up only in the last four months Private insures feel that LIC, the leading administrator of since inception of the
for many industry players," RM PM Jeevan Jyoti Bima Yojana in 2015, the subscriber base has gone up from
Vishakha, MD and CEO, India First 2.96 crore to 5.33 crore and claim amount paid has risen by over three times
Life Insurance Company Ltd, told. in the same period

While the growth in group non- According to government data, the gross enrolment for PMJJBY in 2017-18 was
single premium did make an impact, 5.33 crore with total paid claim amount of Rs. 1,795.32 crore.
there was traction in retail and indi-
Since its inception in 2015, the subscriber base has gone up from 2.96 crore to
vidual policies as well, which added
5.33 crore and claim amount paid has risen by over three times in the same
up to the performance, she said. In- period.
dia First Life registered 39.94 per
cent growth in first-year premium. The PMJJBY is now set for renewal by automatic debit of premium from bank
account of the subscribers next month.

14 The Insurance Times, May 2019