N.S. Kannan, MD & CEO, ICICI Prudential

We’re seeing steady demand for pure protection policies: N.S. Kannan

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Despite the rise of claims due to covid-related deaths in the past one year, ICICI Prudential Life Insurance Co. Ltd, one of India’s largest private insurers does not see the underwriting risk going up for the company. In an interview, N. S. Kannan, managing director and chief executive officer, discusses the impact of the pandemic on the company and emerging trends. Edited excerpts:

What has been the impact of the second wave on your business?

We are seeing a steady demand for pure protection policies, especially group term insurance as employers have started talking to companies like us to say they want to increase the coverage of employees, not only coverage of employees, but also coverage per employee. Post the second wave, we are seeing more and more people coming in wanting to buy protection products. The translation of the entire demand into business has been faster in the group term business. However, there are some frictions that are essentially arising on account of underwriting of mortality risk. Also, during this period we have not been able to send people to the laboratories or hospitals to do medical examinations, nor are we able to send the technicians to the homes of the customers to fulfil the medical examination. So yes, the demand has impacted, people are wanting to buy policies, but the fulfilment has been slow.

Are you seeing any trends pertaining to non-covid claims this year?

Non-covid claims have been broadly the same as last year. We don’t see any increase here. They have been broadly at the same range. Of course, we will have to wait and see whether all the tagging and everything is correct or not over a period of time. But we don’t see that… generally, mortality has been within our assumptions overall and it has been broadly in line with what was expected. So essentially covid-related mortality did add additional claims of about ₹220 crore.

Apart from protection plans, which are the product categories where you have increased traction?

In the savings business, we are currently seeing steady demand as customers seek certainty of returns on investments because life outside is a little bit uncertain. And also, the interest rates have been coming down. So given the general need for financial security we are seeing the importance of non-market-linked products in our business. The second area where we are seeing a lot of demand is annuity which has become one of the most popular products with more and more people looking to plan for retirement well in advance.

Do you think the underwriting criteria for insurance companies will change post the covid experience?

I want to assure you that there is no proposal to increase the price. To answer your question on the long-term mortality impact of covid, we really don’t know. I just wanted to be upfront clear. I don’t want to say we have some superior insights. Because as you know, the pandemic is developing, we know the immediate mortality impact in the form of death claims we are getting that we are very clear about. However, what is going to be the long-term mortality impact of covid on the assumptions, we really don’t know. So, it is not proper, when you’re writing a 40- or 50- year business, to load an immediate experience on account of death claims on the customers who are buying the policy, because we don’t know how the mortality is going to develop over the long period. But we will wait to see some more research and some more long-term trends before we increase the pricing. I’m sure even the reinsurers will also adopt the same as what we would expect.

From a customer’s perspective would insurance products become difficult to get in certain situations ?

It is not going to impact on a normal human life, underwriting and getting an insurance will get easier at least, because there are almost more ways of reaching out to the customers, more technology platforms being available. I don’t think there is any problem. In the medium term, I don’t see a genuine customer not getting insurance. So I don’t see underwriting becoming tighter, as there is a huge opportunity in India where insurance is very under-penetrated.

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