Agency, Mumbai
Published by: Dev Kashyap
Updated Mon, 21 Feb 2022 05:39 AM IST
Summary
LIC also improved its margins by 700 basis points, which is now 9.9 per cent. It is expected to grow up to 20 per cent. SBI Life, ICICI Prudential, HDFC Life and Max Life will suffer the most due to business change.
Life Insurance Corporation of India (LIC), which is preparing to bring IPO, can create a new challenge for private companies after business reforms. Brokerage firm Credit Suisse says that LIC will now increase work in non-participating policies as well.
LIC had made reforms in its surplus and dividend distribution rules. With this, LIC has also improved its margin by 700 basis points, which is now 9.9 per cent. It is expected to grow up to 20 per cent. SBI Life, ICICI Prudential, HDFC Life and Max Life will suffer the most due to business change. With the new amendment, LIC can shift 10 per cent business from participating policy to non-participating policy.
what are its meanings
- In a participating insurance policy, guaranteed and non-guaranteed benefits are given to the customer by way of bonus-dividend.
- In a non-participating policy, only guaranteed benefits are to be paid, hence the margin increases. At present, LIC has four per cent of the new business premium coming from non-participating policies. In case of private companies it ranges from 20-45 per cent. NBP is the amount that an insurance company receives as premium for a new policy in a financial year.
Expansion
Life Insurance Corporation of India (LIC), which is preparing to bring IPO, can create a new challenge for private companies after business reforms. Brokerage firm Credit Suisse says that LIC will now increase work in non-participating policies as well.
LIC had made reforms in its surplus and dividend distribution rules. With this, LIC has also improved its margin by 700 basis points, which is now 9.9 per cent. It is expected to grow up to 20 per cent. SBI Life, ICICI Prudential, HDFC Life and Max Life will suffer the most due to business change. With the new amendment, LIC can shift 10 per cent business from participating policy to non-participating policy.
what are its meanings
- In a participating insurance policy, guaranteed and non-guaranteed benefits are given to the customer by way of bonus-dividend.
- In a non-participating policy, only guaranteed benefits are to be paid, hence the margin increases. At present, LIC has four per cent of the new business premium coming from non-participating policies. In case of private companies it ranges from 20-45 per cent. NBP is the amount that an insurance company receives as premium for a new policy in a financial year.