Which are the product segments you have seen a surge in demand?
Unit-linked insurance plans shrunk for all the players in the industry, including us. But the guaranteed segment grew, as customers did not want to take any kind of market risk. In the segment, life insurers are able to give better post-tax returns than fixed deposits. These products are looking far better.
Demand for term products rose in the initial days of the pandemic. How is it now?
The initial euphoria over term products has come down. In Q1, they were many enquiries. Now, it has a lost a bit of the momentum, but is still higher than last year’s.
How has your firm managed its business during the pandemic?
The kind of life goals that we are focusing on for customers have changed. What we found out was customers are not in favour of taking market risk and not looking at wealth generation, but are focusing on capital and risk protection. We are focusing on products that are endowment-based and guaranteed. We are seeing demand for money back and income-based products.
Irdai is looking to come out with a standard term product. What is your take?
I think it’s a very good idea. Irdai has taken a lot of steps in simplifying things and this is one such step. A retail and group standard product will really help. This will help in raising penetration, especially for people who want to get covered during Covid. There are a few features that will help customers who may not be able to pay as much.
Insurers have turned digital, thanks to the pandemic. Do you see a restructuring in the distribution segments?
It’s tough to say whether anything will change or not structurally. But online has become a very big component and habits have altered. Earlier, life insurance was all about face-to-face meetings. So, the customers as well as the distributors have learnt to behave differently. As percentage of the entire business, the digital portion is going up. Now, all my distributors are selling to the customers digitally. We intend to take this head-on now.
Though still at a deliberation stage, do you feel if life insurers were to re-enter health segment, will it be a game changer?
If the regulator allows the opening up of health insurance sector to life companies, it will be a great opportunity for the life insurers because we understand the business since life and health are closely linked. Also, life companies do have a significant presence in terms of branches, customers, bank partners, and advisers. So, if 2.2 million advisers start selling health polices then it will be great.
Have you passed on the entire hike in reinsurance cost to the consumers?
No, we have not done that. While there was an increase in the re-insurance rates, we had a very clear message from the Irdai that we cannot be doing so (pass on the entire hike). The re-insurance rates will not go up any further. In fact, what we are seeing is re-insurers easing up on the under-writing practices.
What is the trend that you are seeing in Covid-related death claims?
We are seeing a sudden increase in Covid-related death claims. Till July 31, we had only 90 claims but within the next 45 days, the number increased to 240. So, there is problem developing now and we need to be very careful.