Mumbai:
MR Kumar,chairman, Life Insurance Corporation(;LIC) has said the prevailing Covid-19 Pandemic would not only impact the investment income of the Rs 6.5 trillion Indian life insurance industry,It will also severely hit their ULIP as well as Pension and annuity business as the financial market volatility has increased,
“The economic de-growth followed by the socio-political uncertainties are expected to impact the insurance industry including life insurance industry,'' he said adding that the social lockdown as a result of pandemic would impact the premium collection as most of the middle and old aged people would find it difficult to pay premiums upfront and may not be interested to interact with the intermediaries personally.
Kumar was addressig the 16th Annual ‘Insurance Summit’ was organised today by National Insurance Academy, Pune, on “Changing Dimension of Insurance Risks – Strategies to Combat Emerging Challenges”..
However, increased customer’s insured awareness would push the traditional life business like term insurance and endowment positively,he hoped..
Kumar also highlighted the importance of embracing technological innovations through Artificial Intelligence to manage the emerging risks including cyber risks, and the rising expectations of millennial customers.
T.L. Alamelu, member Non-life, IRDAI, mentioned that the issue of under-insurance in the country does not lie in mandating insurance by government and insurance regulator because a stage has been reached where insurance should be a product on “demand” and It cannot be forced upon consumers by the industry or other stakeholders.
“There has generally been a feedback that either the regulator or the government should mandate certain types of insurance, but ideally the solution does not lie in mandating insurance.There has been a demand for mandating title insurance, drone insurance, and household insurance. The example before us is motor third party insurance, which is mandated by law, but still there are huge issues of under insurance,” she said adding that te regulator is now encouraging states to share the details of un-insured vehicles so that reminders and messages can be sent to vehicle owners,'' said Alamelu.
Alamelu said that though the Government is providing the social security solutions through Ayushman Bharat, PMJJBY, PMSBY, PMFBY schemes to the large segment of the society,the insurance industry should come forward to encourage the under insured middle class to become insurance savy and take insurance solutions for their health, household, motor vehicles etc.
The insurance industry has shown a resilience in facing the Covid-19 pandemic and worked as a shock absorber and the pandemic has worked as a catalyst for the insurance industry to be ready with their proactive plan if the crises like these arises in future.
Alamelu said that along with the Covid-19 crises, some of the states also had to face the impact of natural calamities like cyclones and floods.Devesh Srivastava, CMD, GIC Re, said the state owned reinsurer will explore the possibility of providing pandemic cover to the cedants afterwards as currently it is not possible to do anything on this amidst the prevailing Coviod-19 pandemic.
He further said that rates for primary insurers, reinsurace and retro cover have gone up and Indian general insurers should create their reserves to meet any future pandenic like challenges rather than depending upon reinsurnace support.
“There is not much capacity coming from from the ILS capital and it would take another 18 months to expect any kind of normalcy in the reinsurnace market,he said.
Nilesh Garg, MD &CEO,Tata AIG General Insuranace said his company has received a lot of cyber claims in the last couple of months.
“A lot of corporates have shown interest in buying cyber covers. The total liability premium in the market today is pagged around Rs 2700 crore and it will grow at 20 per cent in the future,'' he said.