{"id":129972,"date":"2021-06-24T09:38:12","date_gmt":"2021-06-24T09:38:12","guid":{"rendered":"https:\/\/precoinnews.com\/?p=129972"},"modified":"2021-06-24T09:38:12","modified_gmt":"2021-06-24T09:38:12","slug":"covid-related-death-claims-are-a-concern","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/covid-related-death-claims-are-a-concern\/","title":{"rendered":"‘Covid-related death claims are a concern’"},"content":{"rendered":"
‘The overall death claims have gone up.’<\/strong><\/p>\n “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<\/strong> tells Subrata Panda\/Business Standard<\/em><\/strong>.<\/p>\n How has this phase of lockdown impacted business?<\/strong><\/p>\n April was not as bad as last year, but May numbers have seen an impact.<\/p>\n 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.<\/p>\n If there is any growth, that would be because the risk perception is higher among consumers. Hopefully, things will improve in June.<\/p>\n Has the demand for term products increased?<\/strong><\/p>\n Momentum in term products is back. The first quarter of last year was a bumper quarter for term products.<\/p>\n But as insurance rates went up last year and Covid infections came down, we saw term business slowing down.<\/p>\n Overall, the numbers were higher for the full year, due to the first two quarters. But in Q4, the momentum was low.<\/p>\n Why have the underwriting norms become stricter?<\/strong><\/p>\n 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.<\/p>\n 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.<\/p>\n There are more checks that we have added now. We have added a Covid question.<\/p>\n Will term prices go up again?<\/strong><\/p>\n Term prices were falling from 2008-2009 to 2016-2017, making the prices in India one of the lowest in the developed world.<\/p>\n Now, there has been a hike in price, but it was waiting to happen.<\/p>\n There could be another hike as prices will tend to go up now, directionally.<\/p>\n Has the death claim experience been bad in FY21 and do you expect it to worsen further in FY22 due to the second wave?<\/strong><\/p>\n Yes, the overall death claims have gone up.<\/p>\n It was more than what we had planned and much more than FY20.<\/p>\n The firm has paid more than 1,300 Covid-related death claims amounting to Rs 74 crore (Rs 740 million<\/em>).<\/p>\n 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.<\/p>\n Has there been a lot of demand for group term policies?<\/strong><\/p>\n Yes, there has been a demand for such policies, and death claims from such policies have also been more.<\/p>\n The experience in group term has been worsening because group term is more efficient in reporting claims.<\/p>\n The underwriting element is getting stricter and tougher in group term.<\/p>\n It’s not going to be easy to get a very high cover.<\/p>\n Ultimately, reinsures have a bigger part of the risk for that they get a handsome fee.<\/p>\n They have made money earlier but now they are going through a rough time.<\/p>\n In the long term, would getting vaccinated be made mandatory to get a life cover?<\/strong><\/p>\n We have not put that kind of requirement as of now.<\/p>\n 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.<\/p>\n There is a natural need for insurance now and I cannot deny providing products.<\/p>\n Is there any growth target for FY22?<\/strong><\/p>\n We were in the process of setting a target, but now we have gone back to what we did last year.<\/p>\n We will work on scenarios, instead of targets.<\/p>\n 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.<\/p>\n