The deadly second wave of Covid-19 in India has claimed more than 3.83 lakh lives so far. The havoc wreaked in the last few months have made people more cautious and aware of their insurance needs as more people are buying insurances now.
This, coupled with the lower base effect of the insurance business from the previous year, has shot up the sales figures of insurances during April and May 2021.
The individual life insurance rose by 27.06 per cent during the first two months of the current fiscal year. This is the highest growth in almost last five years.
“There has been a rising awareness about insurance, more so during the current pandemic times,” Bikash Choudhary, Appointed Actuary and Chief Risk Officer, Future Generali India Life Insurance, told India Today’s Data Intelligence Unit.
Covid-19 hit cities with a larger population, where people are generally more internet savvy. Since pure term and health insurance products are also available digitally, it led to an increase in the take up rate of such businesses, Bikash Choudhary added.
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Insurance Regulatory and Development Authority’s latest figures show that 18.5 lakh individual life insurance policies were sold during April-May, which was 14.2 lakh during the same period last year.
Though the base effect is significant across all sectors, as there was a complete lockdown during April-May 2020, the growth is not similar among all the insurance sectors. Life and health insurances have shown more growth than others such as motor and fire.
Life insurance grew 27.06 per cent and health insurance grew 29.25 per cent while motor and fire insurance grew only 8.3 per cent and 3.53 per cent respectively. It is to be noted that fire insurance had grown by 34.42 per cent last year during April-May.
“The growth momentum in the insurance business for the first two months has been good. Individual WRP (weighted received premium) during April-May has grown by 23 per cent for the industry and 47% for HDFC Life.” Niraj Shah, Chief Financial Officer, HDFC Life, told DIU.
While there is an increase in awareness about insurance and financial protection, the base effect of de-growth in Q1 FY21 is also playing a role, Shah added.
It is expected there still be some impact of the second wave in the next few months but prospects for FY22 at an overall level remain cautiously optimistic, he further said.