Friday 21 March 2014

Submitted by : RITIKA, MBA-4th( B),roll no-1273624 Q.22 ASSIGNED

Submitted by : RITIKA, MBA-4th( B),roll no-1273624
Q.22 ASSIGNED
SOLUTION:
Introduction: Many of us buy life insurance because we want to make sure that our loved ones remain financially secure after we die. Income replacement is the No. 1 reason people buy life insurance.
Further my views are related to decline in premium collection and reasons.
DISCUSSION: The busy tax saving season failed to bring cheer to the life insurance market as policy issuance continued to head south, pushing down sales or premium collection by 14 per cent in the current financial year.
 The worst sufferers were the private life insurers, as the number of policies issued by them is down nearly 28 per cent in the current financial year. Premium collected by writing new policies between April and February nose-dived 19.25 per cent to Rs 24,835.65 crore from Rs 30,756.02 crore a year ago. The number of policies issued by the largest life insurer, Life Insurance Corporation (LIC) of India, too, declined 4.63 per cent in the same period.
As a result, the first year premium collection was down nearly 11 per cent to Rs 64,820.5 crore as against Rs 73,121.61 crore in the corresponding period last year. According to data collected by the Insurance Regulatory and Development Authority (IRDA), the life insurance industry collected Rs 89,655.83 crore during this 11-month period by writing new policies.

REASONS:
·         Lack of products continued to be one of the key reasons for this fall in collection.
·         The volatile equity market also took its toll.
·         The competition in the market
·         Some changes in the IRDA policies
·         FRAUDS MADE BY INSURANCE AGENTS

CONCLUSION:
If insurance companies want to grow and would like to increase their share in the market, they should take into consideration the above reasons and ultimately should work on them. As the contract of insurance is based on trust, agents should disclose the relevant information to the customers.


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