The coronavirus outbreak and subsequent lockdown led to sluggish business activities across sectors including the life insurance industry, Edelweiss Tokio Life Insurance MD and CEO Sumit Rai said.
The growth of the life insurance industry is likely to be muted in the short term but will be back to normal levels in the medium and long term amid growing awareness for insurance cover in the wake of COVID-19, according to Edelweiss Tokio Life Insurance.
The coronavirus outbreak and subsequent lockdown led to sluggish business activities across sectors including the life insurance industry, Edelweiss Tokio Life Insurance MD and CEO Sumit Rai said.
“Over the last two months of the lockdown, the life insurance sector has posted negative growth in new business premiums. I expect industry growth to be muted, in the short-term,” he told PTI in an interaction.
However, increased awareness and demand for life insurance might bode well in the medium to longer term and “we should see industry growth coming back to normal levels”, he added.
With an uncertainty over cash-flows in focus, a goal-based financial planning has become a priority area for many families and insurance as a product category has seen a spurt in demand, Rai said.
Adapting to the new normal, he said, barring a small proportion of customers who buy online, life insurance in India has largely relied on face to face advisory, until recently.
“We expect this lockdown to bring a long-term shift in how life insurance is bought and sold and therefore, we are working towards building a 360-degree digital advisory by creating a complete digital customer fulfilment process, empowering sales with requisite skills, tools and customer segmentation,” said the company head.
Among others, the life insurer sector is building automated customer engagement models and structures to increase digital connect.
“Over the past 2-3 months, we have already built a learning tool and enabled customer segmentation, for a personalised customer experience,” Rai added.
As companies are learning several lessons to deal with this pandemic, he said Edelweiss Tokio Life expects these learnings to make way for some innovative products and services during the year.
“At Edelweiss Tokio Life Insurance, we have recently launched a term insurance plan called ‘My Term+’. We are also looking at the savings and guaranteed income category, given the higher customer propensity therein, currently,” he added.
Speaking about company’s performance during this pandemic-driven lockdown, he said even as the life insurance sector has posted negative growth in new business premiums, the company is amongst a few companies to have bucked the trend.
“Supported by robust technology infrastructure and a culture of agility, we have been able to re-imagine our advisory and customer experience to match the new normal,” Rai said.
“Rapid transformation coupled with thorough training for salesforce, Edelweiss Tokio Life’s Individual APE has grown 58 per cent in April and 8 per cent in May (year on year). For the financial year so far, we have posted a year on year growth of 26 per cent in Individual APE (Annualized Premium Equivalent — a measure of business sales),” he said.
Talking about the industry, Rai said that as the pandemic is not yet put behind, several challenges will continue to exist in the immediate future.
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“We will need to follow social distancing norms, and customer interaction for a large part will continue to happen digitally I see the entire industry focusing on technology innovation and digital enablement of its processes to realign to this change,” he added.
At Edelweiss Tokio Life, the company will focus on promoting self-reliance among customers and look at building a completely digital fulfilment ecosystem, Rai said.
India’s life insurers registered a fall of 27.92 per cent in their collective new premium income till May of the current fiscal year at Rs 20,466.76 crore, as against Rs 28,395.90 crore by same period a year earlier, as per data from Insurance Regulatory and Development Authority of India (Irdai).
The sum assured fell by 20.23 per cent to Rs 4,65,050.59 crore as against Rs 5,83,009.39 crore.
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