Exide Life Insurance has witnessed 200 percent jump in term policy sales in April as compared to the previous month, as the need for insurance coverage increased in the wake of COVID-19 pandemic, a senior company official said. He however noted that there was a significant drop in sales of non-term policies.
Given the current scenario, there is a lot more predisposition towards taking insurance, especially term insurance because people are a little bit scared about what could happen, Ashwin B, Chief Operating Officer, Exide Life Insurance Company said in an interaction.
Coronavirus India News LIVE
He said this has also created a space for the company to solicit policies to those customers who are willing to buy insurance during the lockdown currently.
"People are becoming a little cautious of taking any long-term commitment, especially in this slowdown. A large portion of India is non-salaried class. Apart from essential services, small traders and businesses are shut. So, at this point of time, nobody wants to make a commitment as far as longer term products are concerned.
"Very few people want to make that commitment. So what has happened is that volume wise we have seen a 200 percent spike compared to March as far as term policies are concerned," Ashwin said.
However, he added that there has been a significant drop in sales of non-term policies, witnessing a decline of 50 percent.
Apart from this, customers are also approaching the company to take loans against their policies as lockdown has limited the earnings of the people.
"Given the situation, some customers are in need of money. As part of our portfolio, we also offer loan or partial withdrawal or surrender, depending upon the type of policy. We can effect some payouts to the customers at this point of time which can help them tide over their financing requirements. And in dire situations, one may even terminate the full policy," Ashwin said.
When asked if the company has settled any claim related to COVID-19 in April, he said so far it has not received any such case.
The official said as insurance falls under essentials services, the branches of Exide Life are open and customers who are not digital savvy are coming to make their renewal premium payments.
Ashwin said the company is also reaching out to customers through its sales force who are tapping those buyers who might have bought a policy in the past.
The sales team is reaching out to them once again to explore the possibility of them taking additional insurance, he added.
"At this point of time, it is easier for us to convince them to take a term policy or alternatively buy for their friends or families who might not have taken insurance," he said.
The official said that as the lockdown has limited the scope for a physical check-up, the company is conducting video medical check- up to a certain level, on the basis of which Exide Life is able to underwrite policies.
However, Ashwin said there are negative fallouts of the lockdown due to the coronavirus pandemic as it is expected to bear an impact on the economic growth that will hit people's ability to pay towards premium due to the fact that there will be job losses.
"There is an expected economic slowdown and people's ability to pay will come into question," Ashwin said.
The official said that the overall insurance sales have dropped because of the lockdown.
The Bengaluru-headquartered company is a 100 percent subsidiary of Exide Industries.
During financial year 2018-19, the company's total premium income was of over Rs 2,800 crore.Follow our full coverage of the coronavirus pandemic here.