Life insurance corporation of India has out down its peers in the private sector in most parameters used for measuring consumer friendliness. the corporation had fewer lapses,higher claim settlement and no penalties from the regulator.
In terms of persistence of business too, LIC scores better with a lapse ratio of only 5.6% as against private life companies which are all in double digits ranging from 17% to 42%. The only exception is HDFC Life Insurance, which has a lapse ratio of 5.6%. IRDA measures lapse ratio as number of policies lapsed during the year divided the average of the policies in force at the beginning and end of the year.
While Agents of private companies managed to sell only an Average of 3 policies in financial year 2013, The average Agent of LIC sold 29 policies, In financial year 2013,The Insurance Regulatory Authority Imposed penalties on 12 companies, including 2 public sector non-life insurers, for various reason. The penalties ranged from 5 lakh to 1.4 crore. However LIC did not face any penal action.
Interestingly, although only 5 private life insurers paid out dividend, The total payout by private life insurers to their share holders amounted to nearly 80% of LIC's dividend to the government. While LIC paid a dividend of RS 1,436 Crore to the government, Private life companies paid out 1,115 Crore to their share holders in the financial year 2013.
In the 1st quarter of financial year 2014 life, Insurers have written business of RS 19,216 crore as against of 19,451 Crore, Recording a 1.2% shrinkage in business. While private insurers registered a 6.87% decline, The state owned life insurers recorded a growth 2.92%, LIC with RS 14,295 Crore of premium from new policies, saw its new business market share rise from 74.29% to 74.39%.
In terms of persistence of business too, LIC scores better with a lapse ratio of only 5.6% as against private life companies which are all in double digits ranging from 17% to 42%. The only exception is HDFC Life Insurance, which has a lapse ratio of 5.6%. IRDA measures lapse ratio as number of policies lapsed during the year divided the average of the policies in force at the beginning and end of the year.
While Agents of private companies managed to sell only an Average of 3 policies in financial year 2013, The average Agent of LIC sold 29 policies, In financial year 2013,The Insurance Regulatory Authority Imposed penalties on 12 companies, including 2 public sector non-life insurers, for various reason. The penalties ranged from 5 lakh to 1.4 crore. However LIC did not face any penal action.
Interestingly, although only 5 private life insurers paid out dividend, The total payout by private life insurers to their share holders amounted to nearly 80% of LIC's dividend to the government. While LIC paid a dividend of RS 1,436 Crore to the government, Private life companies paid out 1,115 Crore to their share holders in the financial year 2013.
In the 1st quarter of financial year 2014 life, Insurers have written business of RS 19,216 crore as against of 19,451 Crore, Recording a 1.2% shrinkage in business. While private insurers registered a 6.87% decline, The state owned life insurers recorded a growth 2.92%, LIC with RS 14,295 Crore of premium from new policies, saw its new business market share rise from 74.29% to 74.39%.
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