Private life insurer Aditya Birla Sun Life Insurance saw a 10 percent year-on-year (YoY) growth in individual premiums in May 2020 despite the coronavirus lockdown slowing down the industry.
In an interaction with Moneycontrol, Kamlesh Rao, MD and CEO, Aditya Birla Sun Life Insurance, said the company wrote Rs 100 crore of individual business in May 2020 even as the industry de-grew by 30 percent.
The coronavirus outbreak and the subsequent lockdown from March 25 led to a sharp slump in new policy sales for life insurers. This is because field agents were no longer able to visit customer homes to sell products while bank branches had a drop in visitor numbers.
Banks and agents are the two largest distribution channels for the insurance industry, especially for life insurers.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
Rao explained that guaranteed products would continue to see a demand. On May 16, Aditya Birla Sun Life launched a child plan which is a non-linked non-participating life insurance plan.
“The Aditya Birla Sun Life Insurance Child’s Future Assured Plan enables people to plan for the child’s two significant milestones, education and marriage by providing the required cash flow to help meet these goals. It also has in-built waiver of premium element that ensures that the policy continues in case anything unfortunate happens to the life insured,” he added.
Here, an insured can choose periodic pay-outs of 3, 6, or 9 years to plan for a child’s education and a lump-sum at the desired milestone, to plan for marriage.
As far as the company is concerned, Rao said that one-third of business comes from unit-linked insurance plans (Ulips) and rest is traditional.“We have been able to manage the same mix even in April and May. Ulips are also not out of favour since it is not a short-term product. Minimum term is five years and usually returns over a five-year horizon are positive,” he added.