Indian life insurers may shut down practically 1,000 branches as digital gross sales platforms acquire in prominence as a consequence of motion restrictions from the COVID-19 pandemic. There are at present 11,600 life insurance coverage branches throughout the nation.
In keeping with a report by Moneycontrol.com, life insurers are engaged on a number of fronts to counter the influence of COVID-19 pandemic. These embrace promoting insurance coverage merchandise by way of their web site, bank web sites in addition to by way of video calls with clients. Face-to-face gross sales haven’t but resumed in most components of the nation, inflicting gross sales quantity to dip.
As of March 2020, there was a 32.2% lower year-on-year (YoY) in new life insurance coverage premium to $3.39bn. In April 2020, first-year premium collections declined 32.6% YoY to $897m.
With enterprise seeing a dip each month, insurers want to preserve cash for enterprise functions. Department walk-ins are near zero and regardless of this, month-to-month rental prices are being incurred. Saving on prices by lowering department presence is one a part of the fee saving technique by the insurers.
The Moneycontrol report quoting sources within the business stated, “Branches in close proximity to large cities with internet connectivity are likely to be the first victims.”
“Digital has seen a wider presence throughout the nation, particularly in metro cities. Therefore the concept is to leverage this energy quite than investing into department actual property,” stated the chief distribution officer of a personal life insurance coverage firm.
At the moment, banks and brokers are the 2 largest distribution channels for all times insurance coverage firms. On-line gross sales represent lower than 10% of the overall premium collected.
The Moneycontrol report quoting business insiders says that job losses can be inevitable in the long run. The life insurance coverage business at present employs 300,000 individuals as direct staff who work on a full-time foundation with the 24 Indian life insurance coverage firms.