‘Covid-related death claims have become a concern now’

Life business has been impacted by localised lockdowns, but it is expected to pick up in the coming months as risk perception among consumers is very high, Bajaj Allianz Life Insurance Managing Director and Chief Executive TARUN CHUGH has said. He spoke to Subrata Panda on the demand for term products in the second wave, stricter underwriting standards adopted by insurers, price hike in term products, and the mounting Covid death claims. Edited excerpts:

How has this phase of lockdown impacted business? April was not as bad as last year, but May numbers have seen an impact. I will be surprised if there is any significant growth in May compared to the yearago period despite the fact there was a strict lockdown back then. If there is any growth, that would be because the risk perception is higher

among consumers. Hopefully, things will improve in June.

Has the demand for term products increased? Momentum in terms products is back. The first quarter of last year was a bumper quarter for term products. But as insurance rates went up last year and Covid infections came down, we saw term business slowing down. Overall, the numbers were higher for the full year, due to the first two quarters. But in Q4, the momentum was low.

Why have the underwriting norms become stricter?

The entire thing depends on reinsurers. Last year was not a great year for the reinsurers so the underwriting has become tougher from their side. But, if a person is willing to go through medicals, give the proper documentation, and declare his/her health status clearly, it’s not that difficult to get a life cover. There are more checks that we have added now. We have added a Covid question.

Will term prices go up again? Term prices were falling from 2008-09 to 2016-17, making the prices in India one of the lowest in the developed world. Now, there has been a hike in price but it was waiting to happen. There could be another hike as prices will tend to go up now, directionally.

Has the death claim experience been bad in FY21 and do you expect it to worsen further in FY22 due to the second wave?

Yes, the overall death claims have gone up. It was more than what we had planned and much more than FY20. The firm has paid more than 1,300 Covid-related death claims amounting to ~74 crore. At this juncture, I would say it is a concern but we need to wait and watch because the reporting of claims is a bit delayed.