Life insurance companies saw a 35.6 percent growth in their assets in a five year period. Data from the Life Insurance Council showed that the fixed income and equity assets put together stood at Rs 35.6 lakh crore at the end of the December quarter, compared to Rs 22.9 lakh crore five years ago.
Insurance companies are large investors in both equity and debt instruments. However, the proportion of fixed income assets are much higher because insurance is a long-term investment. The majority of products have a term of 10 to 15 years and for this insurers choose debt instruments to invest into.
At the end of the December quarter too, fixed income assets (at book value) stood at Rs 26.5 lakh crore while equity assets (at market value) stood at Rs 8.69 lakh crore.
Claims paid
Insurance companies are judged on their claims settlement abilities. While there is a general perception that life insurers do not pay claims, the numbers prove otherwise.
Data showed that there has been a 45.5 percent rise in the death claims paid by life insurers over five years. This rose from Rs 12,479 crore in Q3 FY15 to Rs 18,164 crore in Q3 FY19.
Similarly, for the distributors as well there has been a rise in the incentives paid. According to the data, the commissions paid saw a 70 percent jump in five years to Rs 18,779 crore in Q3 FY19.
Agents fluctuate
Though individual agents are the backbone of the life insurance industry, the numbers have fluctuated. The industry has 2.15 million agents that has seen its ups and downs over the last five years. Inadequate compensation and a lack of career progression opportunities have led to agents exiting the sector
