Life insurers, who generally focus more on traditional premium plans are giving renewed thrust on Single Premium products to get a share of household savings that are otherwise finding their way into the capital markets through systematic investment plans (SIPs).
In February, single premiums accounted for 73% of the total premium income at LIC, up from 69% in January. For private players, the February share stood at 37%, compared with 27% in January. Since lump-sum cash is paid upfront in single premium products, the average premium per policy increased 12% year on-year for private players and 7% for LIC.
ICICI Prudential Life is focusing on selling single-premium products, which the company believes are customer-centric, said Sandeep Bakhshi, MD and CEO ICICI Prudential Life Insurance.
Insurance companies largely write credit life and individual annuities in their single-premium policies. The regulator has revamped unit-linked insurance products through a number of product regulations in 2010 and 2013. The industry believes it currently offers the best customer proposition among insurance savings products.
With the focus on single premium, private players’ market share in total annualised premium equivalent declined to 54.6% in February 2018.