If the nine month trend for new policies issued continues in the last quarter too, it would be the biggest drop in the the new policies issued in ten years. In the last 9 years, the new policies issued have declined only twice over their previous years. While it fell by 8.4 per cent in 2004-05, it fell by 9.6 per cent in 2010-11.

If we combine the fall in number of policies sold in the first nine months of 2010-11 and 2011-12, the fall is 19.35 per cent over the first 9 month of 2009-10.

The number of new policies issued in a year has gone up significantly from 2.5 crore in 2002-03 to 5.3 crore in 2009-10. But with a 9.6 per cent fall in 2010-11 and an even bigger fall this fiscal, the number of new policies issued could fall well below the 4.5 crore mark in 2011-12.

“Unless some miracle happens in the last quarter, the number of policies will be less than 4.5 crore in this fiscal,” said SB Mathur, secretary general, Life Insurance Council.

Industry insiders are concerned with the current developments.

“It will take some time for things to settle down,” said the CEO of a leading life insurance company. “While 80-90 per cent of the insurance business in the past came from Ulips, a change in the commission structure along with bad market conditions have resulted into less Ulips being sold. Also, companies are changing their business strategy from Ulips to traditional plans and that will start picking up in due course.”