We see a constant demand for pure protection policies: NS Kannan


Despite the increase in covid death claims over the past year, ICICI Prudential Life Insurance Co. Ltd, one of India’s largest private insurers, does not see underwriting risk increasing for the company. In an interview, NS Kannan, Managing Director and CEO, discusses the impact of the pandemic on the business and emerging trends. Edited excerpts:

What was the impact of the second wave on your business?

We are seeing a constant demand for pure protection policies, especially group term insurance, as employers have started talking to companies like us to tell them they want to increase employee coverage, not just employee coverage. , but also coverage per employee. After the second wave, we see more and more people coming in and wanting to buy protective products. The translation of the whole demand into business was faster in the group futures business. However, there are frictions that arise primarily from underwriting the risk of mortality. In addition, during this period, we were unable to send people to laboratories or hospitals to perform medical examinations, nor to send technicians to clients’ homes to perform the medical examination. So yes, the demand has had an impact, people want to buy policies, but the realization has been slow.

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Do you see any trends in non-covid claims this year?

Non-covid claims were broadly the same as last year. We don’t see any increase here. They are generally in the same range. Of course, we’ll have to wait and see if all the marking and everything is correct or not over a period of time. But we don’t see that … in general, the mortality was broadly within our assumptions and it was broadly in line with what was expected. So the predominantly covid-related mortality added additional claims of about 220 crores.

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

In the savings area, we are currently seeing sustained demand as clients seek the certainty of return on investment as life on the outside is a bit uncertain. And also, interest rates have come down. So, given the general need for financial security, we see the importance of non-market products in our business. The second area where we are seeing strong demand is the annuity which has become one of the most popular products with more and more people looking to plan for their retirement well in advance.

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

I want to assure you that there is no proposal to increase the price. To answer your question about the impact of covid on long-term mortality, we really don’t know. I just wanted to be clear from the start. I don’t mean to say that we have superior ideas. Because as you know the pandemic is growing, we know the immediate impact on mortality in the form of death requests that we receive and on which we are very clear. However, what the long-term impact of mortality will be on the covid assumptions, we really don’t know. Thus, it is not appropriate, when you are underwriting a 40 or 50 year old company, to charge an immediate experience due to death claims on customers who buy the policy because we do not know how the mortality is going to turn out. develop over a long period. But we’ll wait until we see more research and longer-term trends before increasing prices. I’m sure even reinsurers will also adopt the same as we expected.

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From the customer’s perspective, would insurance products become difficult to obtain in certain situations?

It will not impact normal human life, at least purchasing and obtaining insurance will become easier, as there are almost more ways to reach customers, more technology platforms being available. I don’t think there is a problem. In the medium term, I do not see a real customer not being insured. So I don’t see underwriting tightening, because there is a huge opportunity in India where insurance is very under-penetrated.

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