The collapse in the stock market has deeply affected the life insurance industry. ICICI Prudential, the private sector market leader has found that there has only been a 20% increase in new retail business weighted premiums in March 2008.

This means that the company’s growth for 2007 to 2008 has sunk to less than 70%.

Observers of the industry feel that the life insurance industry growth will slow down in the current financial year due to the state of the stock market though the fact that insurance products are rather long-term, means that no definite predictions can be made based on current statistics.

Life insurance firms are forcefully inflating their distribution networks, particularly in tier ll and tier lll towns. In January and February of this year, new business premiums had gone up by 95% for those in the private sector. Ticket sizes have remained steady, an outcome that has confused industry watchers who thought tickets sizes would lessen as insurers moved to smaller towns.