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From more than 70 per cent of sales during 2008-09, the share of Ulips in new business premium dropped to a mere 15 per cent in the last financial year The verdict is out: Unit-linked insurance policies, or Ulips, are no more catching customers’ fancy. Be it due to regulatory changes or a volatile stock market, over the last two years, ULIP sales have taken a beating. From more than 70 per cent of sales during 2008-09, the share of Ulips in new business premium dropped to a mere 15 per cent in the last financial year. According to data collected by the Life Insurance Council, during 2011-12, premium collection from Ulips fell 67 per cent to Rs 17,455 crore compared with Rs 52,739 crore in the corresponding period a year ago, accounting for only 15.35 per cent of the total new business premium collection. In the same time, non-linked or traditional business showed a growth of 32 per cent to Rs 96,224 crore, accounting for nearly 85 per cent of the total new business. During 2010-11, Ulips accounted for nearly 41 per cent of the new business premium. Ulip sales have sunk since September 2010, when new regulations by the Insurance Regulatory and Development Authority (Irda) made selling of these hybrid plans less lucrative for both life companies and agents. Ever since new guidelines came into force, traditional plans, which earn a relatively higher commission, have gained the sellers’ attention. Another reason behind the drop in sales in Ulips is the absence of pension products from the market. Individual pension plans, which accounted for a little over 50 per cent in the sales of Ulips two years ago, declined drastically, and accounted for less than two per cent in 2011-12. Premiums collected from individual pension policies during FY12 shrank to Rs 1,139 crore compared with Rs 19,257 crore in 2010-11 and Rs 26,389 crore in 2009-10, the data showed.
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