The Decline and Recovery of Unit-Linked Insurance Plans (ULIPs) in the Indian Insurance Sector

Authors: A. Jyothsna

Country: India

Full-text Research PDF File:   View   |   Download

Abstract: The liberalization of the Indian insurance sector, enacted by the Insurance Regulatory and Development Authority (IRDA) Act of 1999, ended state monopolies by permitting private entry. Rather than privatizing existing public sector entities (LIC and GIC), the government opted to allow new private players to compete alongside them. This infusion of competition, often through joint ventures with foreign firms, catalyzed profound market developments, including innovative products, enhanced distribution channels, and stronger regulatory standards. The most notable product innovation was the Unit-Linked Insurance Plan (ULIP), a hybrid financial instrument combining investment and insurance. This study examines the trajectory of ULIPs, the flagship product of this new era, to understand their market performance between 2003 and 2014.
This study employs a quantitative analysis of secondary data extracted from IRDA Annual Reports and the Economic Survey of India. The core variable of analysis is the distribution of first-year premiums for ULIPs. Data is processed and analyzed using SPSS version 20. Analytical techniques include descriptive statistics to calculate growth rates and percentage contributions of ULIPs to total premium income. Furthermore, a Mann-Whitney U test (equivalent to the Wilcoxon rank-sum test) is utilized to determine if there is a statistically significant difference in the premium patterns between private insurers and the public sector leader, LIC.

Keywords: LIC, ULIP, GDP, Mann Whitney Test, Indian Economy

Paper Id: 232731

Published On: 2025-08-07

Published In: Volume 13, Issue 4, July-August 2025

Share this