'The overall death claims have gone up.'
"The firm has paid more than 1,300 Covid-related death claims amounting to Rs 74 crore," Bajaj Allianz Life Insurance Managing Director and Chief Executive Tarun Chugh tells Subrata Panda/Business Standard.
How has this phase of lockdown impacted business?
April was not as bad as last year, but May numbers have seen an impact.
I will be surprised if there is any significant growth in May compared to the year-ago period despite the fact there was a strict lockdown back then.
If there is any growth, that would be because the risk perception is higher among consumers. Hopefully, things will improve in June.
Has the demand for term products increased?
Momentum in term products is back. The first quarter of last year was a bumper quarter for term products.
But as insurance rates went up last year and Covid infections came down, we saw term business slowing down.
Overall, the numbers were higher for the full year, due to the first two quarters. But in Q4, the momentum was low.
Why have the underwriting norms become stricter?
The entire thing depends on reinsurers. Last year was not a great year for the reinsurers so the underwriting has become tougher from their side.
But, if a person is willing to go through medicals, give the proper documentation, and declare his/her health status clearly, it's not that difficult to get a life cover.
There are more checks that we have added now. We have added a Covid question.
Will term prices go up again?
Term prices were falling from 2008-2009 to 2016-2017, making the prices in India one of the lowest in the developed world.
Now, there has been a hike in price, but it was waiting to happen.
There could be another hike as prices will tend to go up now, directionally.
Has the death claim experience been bad in FY21 and do you expect it to worsen further in FY22 due to the second wave?
Yes, the overall death claims have gone up.
It was more than what we had planned and much more than FY20.
The firm has paid more than 1,300 Covid-related death claims amounting to Rs 74 crore (Rs 740 million).
At this juncture, I would say it is a concern, but we need to wait and watch because the reporting of claims is a bit delayed.
Has there been a lot of demand for group term policies?
Yes, there has been a demand for such policies, and death claims from such policies have also been more.
The experience in group term has been worsening because group term is more efficient in reporting claims.
The underwriting element is getting stricter and tougher in group term.
It's not going to be easy to get a very high cover.
Ultimately, reinsures have a bigger part of the risk for that they get a handsome fee.
They have made money earlier but now they are going through a rough time.
In the long term, would getting vaccinated be made mandatory to get a life cover?
We have not put that kind of requirement as of now.
We will have to wait and see. At this juncture, I am not insisting on vaccinations, otherwise, customers will not be able to buy these products.
There is a natural need for insurance now and I cannot deny providing products.
Is there any growth target for FY22?
We were in the process of setting a target, but now we have gone back to what we did last year.
We will work on scenarios, instead of targets.
There is no certainty, we do not know if there will be the third wave and we do not know to what extent the economy will be opened up.
