Growth of Postal Life Insurance (PLI) & Rural Postal

Life Insurance (RPLI) from 2001-02 to 2015-16

A project report submitted to fulfill the course curriculum of 1 st

Refresher Course on Research Methodology and Data Analysis
in Social Sciences, at HRDC, University of Burdwan

Submitted by-
Dr. Mukul Kamle
Asst. Professor of Geography
Deshabandhu Mahavidyalaya
Chittaranjan
 CONTENT
1. INTRODUCTION

2. OBJECTIVES

3. DATABASE AND METHODOLOGY

4. INTERPRETATION

5. CO-RELATION AMONG NUMBER OF POLICY POCURED, TOTAL SUM ASSURED AND

PREMIUM INCOME FROM 2001-02 FINANCIAL YEARS TO 2014-15 FINANCIAL YEARS

6. FORECAST/PREDICT THE TREND/GROWTH OF POSTAL LIFE INSURANCE

7. CONCLUSION
Growth of Postal Life Insurance (PLI) & Rural Postal
Life Insurance (RPLI) from 2001-02 to 2015-16

INTRODUCTION:

Postal life insurance is an insurance policy for welfare of the people; it ensures life insurance
cover with high return on premium. It is a scheme of central government which was introduced
in 1884 for the employees of postal department only but with time it also started to expand.
Rural postal life insurance is also a part of Postal insurance particularly for the weaker section
and women residing in rural areas. The scheme of rural postal life insurance was established in
1995.

In the present study, growth and trend of postal life insurance has been observed for a period
of 14 years i.e. from 2001-2002 to 2015-2016. Here, three aspects for the measurement and
analysis of the growth of postal life insurance has been considered such as number of policy
procured, collection of the sum assured (Rs. in ten million) and collection of premium (Rs. In ten
million) in each financial year. Correlation and time series analysis have been applied to know
interrelationship among the variables, their trend and prediction for future.

OBJECTIVES: The study includes the following objectives:

1. To identify the natures of growth of number of policy procured from financial year
2001-02 to 2014-2015

2. To assess the trend of the collection of sum assured (Rs. in ten million) in the financial
year between 2001-02 and 2014-2015

3. To assess the trend of the collection of premium (Rs. in ten million) from 2001-02 to
2014-2015 financial year.

4. To know the interrelationship between these three above mentioned aspects to analyse
the growth of Postal Life Insurance from the financial year 2001-02 to 2014-2015

5. To forecast/predict the trend/growth of postal life insurance in terms of policy procured

(no), collection of sum assured (Rs. in ten million), and collection of premium (Rs. in ten
million).
DATA BASE AND METHODOLOGY:

The data of the growth of postal life insurance has been collected from the Directorate, PLI,
and Department of Posts which is also published in statistical year book 2017 by MOSPI.
Growth of postal life insurances from 2001-02 to 2014-15 financial year has been analyzed by
applying various statistical techniques such as descriptive analysis, correlation and time series
analysis through SPSS and also through different graphical representation such as line graph,
bar graph, multiple line graph, and scatter diagram.

Year Policy_ Policy_ Sum_Assured Sum_ Premium_ Premium_Income

procured Procured_ Assured_ Income _growth
growth growth

2001-02 172163 8.92 1710.02 20.27 501.85 13.19

2002-03 212967 23.7 2110.21 23.4 590.84 17.73
2003-04 276880 30.01 2846.66 34.9 698.17 18.17
2004-05 344403 24.39 3830.64 34.57 904.58 29.56
2005-06 364564 5.85 4533.2 19.86 1078.66 19.24
2006-07 318058 -12.75 4146.67 -8.52 1211.78 12.34
2007-08 355700 11.83 5020.62 21.08 1480.34 22.16
2008-09 417832 17.47 7345.56 46.31 1860.52 25.68
2009-10 597234 42.93 13366.22 81.96 2412.75 29.68
2010-11 540743 -9.45 13519.25 1.14 3003.33 24.47
2011-12 482423 -10.79 13288.16 -1.71 3681.03 22.56
2012-13 454053 -5.08 14695.6 10.59 4557.29 23.8
2013-14 433182 -4.6 16129.39 9.76 5352.01 17.44
2014-15 324022 -25.2 14276.92 -11.49 5967.46 11.5

INTERPRETATION:

NATURE OF GROWTH OF NUMBER OF POLICY PROCURED (2001-02 to 2014-15) :

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Policies procured during the year(No.) 14 172163 597234 378158.86 118973.688
Policies procured during the year (No.) -
14 -25.20 42.93 6.9450 19.28355
% growth over Previous year
Valid N (listwise) 14

The first objective of the study is to identify the natures of growth of number of policy procured
from financial year 2001-02 to 2014-2015. Descriptive statistics for the two data related to
policy procurement is given below:
From the data it has
been found that
maximum positive
growth in terms of policy
procurement in postal
life insurance occurred
in the financial year
2009-10 while the
lowest number of policy
procurement has been
observed in the year
2001-02 (number
172163). It has increased
42.93 point (per cent) in
2009-10 than the
previous year i.e. 2008-

09. But after this

remarkable increase in
the year 2009-10,
(number of policy
procurement is 597234)
the negative growth in
terms of policy
procurement has been
started. Maximum fall of
policy procurement has
been observed in the
financial year 2014-15
(25.2 per cent) before
that in the financial year
2006-07 rate of policy
procurement fall down
to 12.75 per cent than
the previous year i.e.
2005-06.

In the span of 14 years, positive growth of policy procurement has been observed in eight
financial years such as in 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2007-08, 2008-09, and
2009-10 while the growth is negative for the remaining six financial years. Mean number of
policy procurement is 378158 and eight financial year also are above it.

NATURE OF GROWTH OF TOTAL SUM ASSURED (2001-02 TO 2014-15):

The second objective of the study is to assess the trend of the collection of sum assured (Rs. in
ten million) in the financial year between 2001-02 and 2014-2015. Sum assured is known as the
coverage amount and is the total amount which an individual is insured.
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Sum Assured (Rs in ten million) 14 1710.02 16129.39 8344.2229 5478.96530
Sum Assured - % growth over
14 -11.49 81.96 20.1514 24.50038
Previous year
Valid N (listwise) 14

Only three financial years have negative growth in terms of the collection of sum assured which
are 2006-07, 2011-12 and 2014-15. Maximum sum assured has been observed in the year 2013-
14 (Rs. 161293 million) with 9.67 percent growth while it is lowest in 2001-02 financial years.
(Fig.4) Considering growth of sum assured, maximum positive growth has been observed in the
financial year 2009-10 while highest negative growth has been found in the financial year 2014-
15.
From the line graph (Fig. 3) it has been found that from the financial year 2004-05 the trend of
the growth of sum assured is decreasing and it is negative in 2006-07, after that there is rapid
upliftment/positive growth in terms of the collection of sum assured (Rs. in ten million) and it is
optimum in the year 2009-10. Again the line started to decrease and negative growth has also
been observed in the financial year 2011-12 and 2014-15.

NATURE OF THE GROWTH OF PREMIUM INCOME:

Premium income means the money that an insurance company makes from people paying for
insurances. In case of Postal Life Insurance, it is income of postal department from selling
insurance policies.

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Premium Income (Rs. in ten million) 14 501.85 5967.46 2378.6150 1848.01345
Premium Income - growth over
14 11.50 29.68 20.5371 5.89585
Previous year (%)
Valid N (listwise) 14

From the descriptive statistics it has been found that maximum premium income collected is
Rs. 59674 million in the financial year 2014-15. But in this financial year, growth of premium
income is lowest accordingly as the growth of policy procurement as well as the growth of total
sum assured than the previous year both are negative and lowest in the time span of 14 years.

Considering the bar diagram (Fig.5) it has been observed that collection of premium income
increases step by step with time because of getting money from all the insured policies but
actually how much amount of premium income really occurred is clear from the fig.6 .
From 2001-02 to 2004-05, the growth of premium income interms of previous year income is
positive while it statred decreasing from 2004-5 to 2006-07, again the growth of premimum
income increases from 2006-07 financial year to 2009-10. After this finincial year no remarkable
change has not occurred. Although, in this 14 years time span of the growth of premium
income considering its previous year income, no negative growth has been observed which is
also evident from Fig.5, but it is till alarming that the trend of growth is decreasing in manner
from the financial year 2012-13.

CO RELATION AMONG NUMBER OF POLICY POCURED, TOTAL SUM ASSURED AND PREMIUM INCOME
FROM 2001-02 FINANCIAL YEARS TO 2014-15 FINANCIAL YEARS:

The fourth objective of the study is to know the interrelationship between these three above
mentioned aspects to analyse the growth of Postal Life Insurance from the financial year 2001-
02 to 2014-2015.

Correlations
Policies procured Sum Assured Premium Income
during the year
(No.)
Pearson Correlation 1 .766
**
.479
Policies procured during the
Sig. (2-tailed) .001 .083
year (No.)
N 14 14 14
Pearson Correlation .766
**
1 .919
**

Sum Assured Sig. (2-tailed) .001 .000

N 14 14 14
Pearson Correlation .479 .919
**
1
Premium Income Sig. (2-tailed) .083 .000
N 14 14 14
**. Correlation is significant at the 0.01 level (2-tailed).

From this correlation matrix it has been clear that positive correlation is present in between
policy procured during this year and total sum assured. The value of correlation is 0.766, the
relationship is also significant in 0.01 level but the relation of policy procured during this years
and premium policy is not strongly positive rather moderate in nature (0.479). This relationship
is also not significant in the sense that the P value is greater than 0.01. Total sum assured is
very strongly correlated with premium income (.919) and it is highly significant in 0.01 level. So,
it is clear that more sum assured increases the collection of premium while more number of
policy procurement increases the collection of sum assured.
Considering annual growth of these three above mentioned aspect it has been found that
(Fig.7) there is quite similarity between the trend and/or growth rate of policy procured, sum
assured and premium income. All three lines move down ward in the year 2006-07 and also in

2010-11, although there intensities are different. The annual growth of policy procured and
sum assured are highly correlated which is clear from the graph while premium income
maintains moderate relationship with the annual growth of the other two variables related to
the growth pattern of postal insurance since 2001-02 to 2014-15.

FORECAST/PREDICT THE TREND/GROWTH OF POSTAL LIFE INSURANCE:

The Final objective of the present study is to forecast or predict the growth of postal life
insurance in terms of policy procured (no), collection of sum assured (Rs. in ten million), and
collection of premium (Rs. in ten million).

From the time series analysis in policy procurement (model-1) it has been observed that there
is deviation from observed and fit line of policy procurement with time. Considering prediction
of their future growth up to 2020 the result is not quite satisfactory. The deviation between
observed value of total sum assured and best fit line (model-2) are lesser than the model 1. In
case of future estimation (2020) the trend is positive but not increasing rapidly which indicates
moderately positive condition where in case of model-3 i.e. the time series of premium income
is quite satisfactory. Here, the observed and predicted (fit) values/lines are coinciding to each –
other and future trend line is also moving upward.

Forecast
Model 2015 2016 2017 2018 2019 2020
Forecast 324023 324023 324023 324023 324023 324023
Policies procured during the
UCL 482653 548358 598776 641280 678727 712581
year (No.)-Model_1
LCL 165394 99688 49271 6767 -30680 -64535
Forecast 15243.60 16210.29 17176.97 18143.66 19110.34 20077.03
Sum Assured-Model_2 UCL 19227.92 21844.96 24078.01 26112.29 28019.54 29836.56
LCL 11259.29 10575.62 10275.94 10175.03 10201.15 10317.49
Forecast 6582.91 7198.36 7813.81 8429.26 9044.71 9660.16
Premium Income-Model_3 UCL 6823.00 7735.21 8712.13 9744.26 10825.23 11950.43
LCL 6342.82 6661.51 6915.49 7114.26 7264.19 7369.90
For each model, forecasts start after the last non-missing in the range of the requested estimation period, and end at
the last period for which non-missing values of all the predictors are available or at the end date of the requested
forecast period, whichever is earlier.

CONCLUSION:

From the above analysis it has been found that the growth of policy procurement in postal life
insurance faces various ups and down since 2001-02 financial year but the recent trends is
negative in nature which should need special attention to recover.
Considering total sum assured collection, it is basically related to numbers of policy procured in
each year; if more number of policies are procured then automatically collection of total sum
assured will increase. So, positive relationship is present between them.
Premium income is also related to sum assured. Premium income is cumulative in nature,
therefore, income from it is never be negative unless or until policy procurement is stopped.
Future trend of the growth of postal life insurance is therefore depends on the increasing
number of policy procurement per year.