MUMBAI: The average premium per policy collected bylife insurance companies has dropped close to 8% in FY12 over last year, a study conducted by consulting major Deloitte India has said. The survey covered nine private life insurers.
“Insurers with higher vintage (over eight years of existence) managed to retain the ticket size of regular premium policies at around Rs 32,000 in FY12, similar to that of last year. The younger insurers observed a decline in average ticket size of regular premium policies by nearly 16% from around Rs 34,500 in FY11 to about Rs 29,000 in FY12,” the study noted.
“Older insurers, along with their more experienced channel partners have been able to respond to changes in regulations, especially related to ULIPs (unit-linked insurance policy), better than the younger insurers by refining their product portfolio more swiftly. Younger players are relatively more reliant on captive channels and customer base, making it difficult to alter focus on customer segments and channels,” said Sachin Sondhi, senior director, Deloitte India.
Bancassurance emerged as the channel procuring the highest ticket size business followed by broking and direct channels. However, direct and broking channels have managed to increase their average ticket sizes. “”Whereas ticket size for bancassurance channel decreased by about 7%, policy procured by direct and broker channels, which have lesser reliance on ULIP products, witnessed an increase in ticket size over the last three years. Direct channel witnessed the highest increase of 20% in ticket size at Rs 27,400 in FY12 as against Rs 22,900 in FY10,”” the report revealed.
The proportion of Ulips to non-ulips in the nine participants’ portfolio was 54:45, the study found. Pure term products accounted for the balance 1%, suggest a gradual shift away from Ulips.
“”As insurers gradually shift focus towards more traditional products and ticket sizes stabilize, players will need to find innovative combinations of channels, products and customer segments to achieve growth. Players will need to better integrate their strategies and operations with bancassurance partners to increase penetration in smaller cities,”” Deloitte India said in an official release.