Whereas the Covid-19 pandemic has wreaked havoc throughout sectors, life insurers really feel this black swan occasion has resulted within the bolstering of demand for insurance coverage merchandise, be it in safety, well being, assured return section or others. From being a push product, insurance coverage has change into a “nudge product” as a result of uncertainties.
In the course of the Enterprise Commonplace webinar, moderated by Consulting Editor Tamal Bandyopadhyay, main minds of the life insurance coverage business appeared to agree that the present scenario has led prospects to be extra conscious of insurance coverage. And whereas demand for insurance coverage, particularly safety merchandise, has gone go up, affordability is a matter.
“Any pandemic like this will immediately increase awareness among customers. We do see a lot of interest. This will be a defining moment,” stated N S Kannan, MD & CEO, ICICI Prudential Life Insurance coverage.
Whereas the business noticed its new enterprise premium decline considerably in Q1FY21, since July, enterprise has seen an uptick, led by the state-owned insurance coverage behemoth, the Life Insurance coverage Company (LIC).
“Ever since the pandemic started, we have lost a lot of business. Having said that, our figures for July look like July 2019, and for August, it will be similar to last year. Apart from April and half of May, we have come remarkably well,” stated Mahesh Kumar Sharma, MD & CEO, SBI Life Insurance coverage.
“Looking at China and Hong Kong, the demand for insurance products will go up after Covid. This is really showing up,” added Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance coverage. He stated whereas demand was not an issue, there have been bottlenecks on the provision aspect. “When it comes to prospects shopping for insurance coverage, we have been down 34 per cent in April. That is getting higher. In July, we have been at minus three per cent.”
“There is very high level of research for term insurance. The number of request for health insurance is 1.5-2 times of car insurance in India. Also, there is 60 per cent year-on-year growth in health and term insurance,” stated Yashish Dahiya, CEO & Co-Founder, PolicyBazaar.com.
He went on so as to add that whereas Covid-19 has elevated demand, it has impacted affordability. “The self-employed section of the country is strongly hit. They are struggling. Usually, this group does not have very good documentation of income,” he stated.
Agreeing with others, LIC MD TC Suseel Kumar added that that is certainly a defining second for the sector. “When there is uncertainty, people tend to invest good money on annuities. Our annuities business is really picking up and giving us good volumes,” he stated.
“If we waste a pandemic, we have only ourselves to blame,” added Vibha Padalkar, MD & CEO, HDFC Life. “I am hopeful behavioural patterns, especially of youngsters, will change. Young people will no longer see life cover as an expense, but a necessity.”
In the meantime, in regards to the proposed preliminary public providing (IPO) of LIC, Kumar stated, “IPO is a story that will take some more time to fully unfold. From LIC’s side, maybe we will have some more regulation to comply with, maybe we will have some more disclosures.” He added, “The intention is to get it done in this fiscal year, but I am not sure if it will happen or not.”