COVID-19 has resulted in tight medical and financial underwriting criteria before policy issuance, RM Vishakha, Managing Director and CEO, IndiaFirst Life Insurance, tells Preeti Kulkarni in a freewheeling interaction on the pandemic impact and more
What has been your experience in dealing with COVID-19, in terms of operations, sales and claim servicing, particularly in the context of the shift towards digital?
To a large extent, companies such as ours, which had invested in digital much ahead of time, didn’t see much impact. Our processes eliminated physical submission of claim documents by enabling acceptance through WhatsApp. Having said that, for some basic documents such as death certificate, post-mortem documents and so on, you needed on-the-ground government authorities to be open. In April, May and June, there was a slowdown in the receipt of documents, but inflow of claims was much higher in July and August. There was no adverse impact for policyholders. In fact, most insurance companies, including ours, kept offices open purely for receiving claim intimation and documents, besides accepting them through the standard email mode.
On the basis of what we have seen so far, I think people will adapt to digital in cases where processes are simple. If the digital process turns out to be cumbersome, they might choose the physical mode.
What is the number of COVID-19 claims you have received and settled so far?
We have settled close to 363 COVID-19 death claims, with the claim amount being close to Rs 21.64 crore so far.
Will potential policyholders with co-morbidities face stricter scrutiny going forward?
The COVID-19 questionnaire that has been introduced is an additional piece of documentation. Restrictions are coming up in higher sums insured applications in terms of tighter underwriting criteria, both financial and medical. For instance, non-medical limits have got reduced. Insurers will want to do full-fledged medical check-ups. In terms of financial criteria, earlier, for lower sums assured, we would rely on self-declaration of income. Now, we would want to see income proofs. You want to be very sure because the underlying risk that insurance companies have to watch out for is anti-selection. We need to make sure we are insuring probabilities, not certainties.
Will those who had been infected with COVID-19 find it difficult to get a life cover now?
There will be no such discrimination. Medical check-ups will probably be mandatory now to ensure that none of the vital organs are impacted, because COVID-19 has been the kind of virus, where no one knows what will be the impact. It has become one of those dreaded diseases because of the unpredictability. So, if a person has had COVID-19, it would be prudent on the part of insurers to carry out medical check-ups to find out whether there is any impact on the individual’s health. So, the risk of insuring someone who is already affected by COVID-19 needs to be carefully evaluated and provided for.
Will COVID-19 push up insurance premiums?
Even before COVID-19, many reinsurers had increased premiums due to adverse mortality experience. There has been no further revision post March and April. Having said that, insurance premiums will depend on the mortality experience. We need to wait and watch.
Many life insurers have raised their term insurance premiums since March. Have you increased your premiums during the period?
We have not increased premium rates, but have just introduced a new term product – guaranteed protection plan – with multiple options built in, including term return of premium and short premium payments. We have received reinsurance support, and they have not revised the rates, so we have not revisited ours. Having said that, our product has just been launched, so experience will tell, going forward.
Overall, across the industry, are we likely to see another round of premium rate hikes during this financial year?
I think the hike has already been factored in March-April. Unless something else comes up, I don’t see that as a problem.
What is your current product mix like? What are the categories you are focusing on?
We did not have an offline term product, so there is a huge growth in the number of policies, but is more of a base effect. In October, we saw an unprecedented 90 percent share of traditional (which includes term) insurance in our portfolio. We are seeing a pull towards guaranteed and protection products.
What is your view about the IRDAI-mandated standardised term insurance product that all life insurers have to offer?
It has been in line with intent of the IRDAI to roll out some products that are universal, in every segment. Customers know that they can buy such products from any company and the features will be standard.
Will claim settlement record and premiums turn out to be the key differentiators?
Every insurance company can create its own differentiator. It does not have to be price alone. Companies will have to create their own niche and decide who they want to focus on. I will want to focus on customers who value convenience and are willing to pay for it.
How has IndiaFirst Life’s experience been with Pradhan Mantri Jeevan Jyoti Bima renewals and claim settlement?
Renewals have not been a problem. The Government has enabled and followed up with banks to keep a tight control over renewals. The renewal rate is above 90 percent. Claims continue to be adverse – have been so from day one. There is a need for premium revision, the government has been evaluating it, but then COVID struck, and it became a wrong time to re-evaluate premiums.
Mis-selling continues to be a concern for policyholders. What systems have you put into place to check mis-selling?
We make video-based pre-issuance verification calls (PIVC) to ensure that we can see customers and they understand what they have bought before we on-board them, especially the vulnerable customer base. We have created a potentially vulnerable customers’ grid. This includes senior citizens, people committing premiums beyond their paying capacity, less-educated customers taking higher covers and so on.