The life insurance sector reported sluggish growth of just one per cent for the first quarter during the current financial year ended June 30, 2009.

The private sector insurance firms witnessed decline in premium collection during the period according to recently released figures by the Insurance Regulatory & Development Authority (IRDA).

Public sector life insurance company LIC, retaining market share of 62.45 per cent, reported a growth rate of 20 per cent to Rs 9,028 crore in Q1 as compared to Rs 7,524 crore for the same period last year. LIC recorded 23 per cent increase in the sale of policies during the first quarter.

The new premium income of insurance industry stood at Rs 14,456 crore in Q1 as compared to Rs 14,320 crore a year ago. The private insurance firms, on accounts of decline in single premium policy income, recovered a new premium of Rs 5,427 crore in Q1 as compared to Rs 6,795 crore in the December quarter.

Almost all private insurance companies including ICICI Prudential, Bajaj Allianz, Tata AIG and SBI Life reported decline in premium income. Interestingly, Reliance Life reported 41 per cent increase in the sale of new policies, growing from third to first position in terms of policies sale.