Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now
you are here: HomeNewsPodcast

Simply Save | How COVID-19 has affected Indian life insurance sector and policyholders

Term insurance premiums have risen in India, but continue to be cheaper compared to global markets, says Kamlesh Rao, MD and CEO, Aditya Birla Sunlife Insurance

January 25, 2022 / 07:47 PM IST


Term insurance premiums have been on the rise since March 2020, with several life insurance companies having hiked their rates across age bands. This space has seen several rounds of hikes, the latest one being in December 2021, when ICICI Prudential Life Insurance and HDFC Life Insurance increased their term insurance rates. Some other companies have indicated that they will raise their premiums in the months to come.


One of the reasons is higher mortality – or deaths – across and the world and in India due to COVID-19 that prompted global reinsurance companies to increase their rates and, in turn, forced Indian life insurance companies to pass on a part of the hikes to their customers. But this apart, a correction in term rates was due as premiums in India have been on the lower side compared to global markets over the last ten years. Despite the rate hikes, term insurance premiums in India continue to be cheaper compared to global markets.


In addition, life insurance companies have also tightened their underwriting norms in the aftermath of COVID-19, with income levels, educational qualifications and of course, policyholders’ COVID-19 history, becoming key parameters in the insurance application evaluation process. Medical check-ups prior to policy issuance are now the norm, particularly for high-value covers. “Better analytical models have entered the picture and our claim experience has now become richer. Medical underwriting in integral part of the evaluation process. There is significant difference in claim experience between medically-underwritten polices and others. In our case, 97 percent of pure protection policies go through medical underwriting,” says Kamlesh Rao, MD and CEO, Aditya Birla Sunlife Insurance.

For more insights into COVID-19’s impact on the Indian life insurance industry and policyholders, tune into Simply Save.

Preeti Kulkarni is a financial journalist with over 13 years of experience. Based in Mumbai, she covers the personal finance beat for Moneycontrol. She focusses primarily on insurance, banking, taxation and financial planning
Sections
ISO 27001 - BSI Assurance Mark