We think the importance of ULIP products in the Indian life insurance industry cannot be emphasized enough:
(1) As per Life insurance council data, ULIPs account for 55%-65% of new individual premiums and 34%-39% of renewal premiums for the industry.
(2) We estimate inflows into equity markets through premiums collected to be about Rs600-700bn (US$13-15bn) during FY2009.
(3) Equity AUM of insurers stood at Rs4 tn (US$88bn), 34% of total, as of December 2009
Non-clarity on this issue could impact new premium sales, renewals and higher surrenders for the insurance companies, while simultaneously impacting bancassurance partners distributing life product
