Page 45 - Life Insurance Today July - December 2020

Table I.12: Commission Expenses of Life Insurers
S. Segment Item LIC Private Sector Total
No. 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20
1. First year Commission (Rs.crore) 8,799.61 9,711.17 5,813.95 6,016.65 14,613.56 15,727.82
Commission Growth (%) 6.85 10.36 13.99 3.49 9.58 7.62
CER (%) 28.09 16.76 13.88 13.57 19.96 15.38
2. Commission on Commission (Rs.crore) 487.72 440.76 391.34 499.03 879.06 939.79
Single premium Growth (%) -7.02 -9.63 114.27 27.52 24.30 6.91
CER (%) 0.44 0.37 1.27 1.36 0.62 0.60

3. New Business Commission (Rs.crore) 9,287.33 10,151.93 6,205.30 6,515.68 15,492.63 16,667.61
Commission (1+2) Growth (%) 6.02 9.31 17.45 5.00 10.32 7.58
CER (%) 6.52 5.69 8.54 8.05 7.21 6.43
4. Renewal Commission (Rs.crore) 10,057.99 10,340.49 2,223.93 2,465.65 12,281.92 12,806.14
Commission Growth (%) 5.75 2.81 23.67 10.87 8.60 4.27
CER (%) 5.15 5.14 2.27 2.19 4.19 4.08
Total Commission Commission (Rs.crore) 19,345.32 20,492.42 8,429.23 8,981.33 27,774.54 29,473.75
(3+4) Growth (%) 5.88 5.93 19.03 6.55 9.55 6.12
CER (%) 5.73 5.40 4.94 4.64 5.47 5.14
CER: Commission Expense Ratio

Table I.13: underwritten (47.12 per cent in 2018-19). LIC paid benefits
Operating Expenses of Life Insurers of Rs. 2.53 lakh crore in 2019-20, constituting 66.62 per
cent of the premium underwritten (Rs. 2.49 lakh crore in
Insurer Item 2018-19 2019-20 2018-19 and 73.86 per cent of the premium underwritten).
LIC Operating Expenses 29,182.02 34,568.04 The benefits paid on account of surrenders / withdrawals
(Rs. crore) increased to Rs. 1.22 lakh crore in 2019-20 (Rs. 1.11 lakh
Growth (%) -3.19 18.46 crore in 2018-19), of which LIC accounted for 57.51 per cent
OER (%) 8.65 9.11 and remaining 42.49 per cent by private sector. In the
Private Operating Expenses 21,948.24 25,552.96 current year, in case of LIC, out of the Rs. 70,148 crore
Sector (Rs. crore) surrenders, ULIP policies accounted for Rs. 3,106 crore
Growth (%) 17.51 16.42 (4.43 per cent) as against Rs. 4,082 crore (5.89 per cent)
OER (%) 12.86 13.20 in 2018-19. In case of the private insurers, the ULIP
surrenders accounted for Rs. 38,327 crore (73.96 per cent)
Total Operating Expenses 51,130.26 60,121.00
in 2019-20 as against Rs. 35,949 crore (85.73 per cent) in
(Rs. crore)
2018-19.
Growth (%) 4.73 17.58
OER (%) 10.06 10.49
Death Claims
OER: Operating Expense Ratio In case of Individual Life Insurance business, the life insurance
companies have paid 8.46 lakh claims on individual policies,
Claims of Life Insurers with a total payout of Rs. 18,042 crore in the year 2019-20.
The life insurance industry paid benefits of Rs. 3.51 lakh The number of claims repudiated was 8,927 for an amount
crore in 2019-20 (Rs. 3.30 lakh crore in 2018-19) constitutes of Rs. 555 crore and the number of claims rejected was 2,262
61.21 per cent of the gross premium underwritten (64.88 for an amount of Rs. 20 crore. Insurer wise claim details are
per cent in 2018-19). The benefits paid by the private provided in Statement 7 and 8.
insurers was Rs. 97,916 crore (Rs. 80,393 crore in 2018-
19) constituting 50.60 per cent of the premium Claim settlement ratio of LIC was at 96.69 per cent as at

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