Page 24 - Insurance Times September 2020

A report by Motilal Oswal recently "This rider will not cover Covid-19 inci- Crisis will increase aware-
noted that due to the lockdown in April dent in the first 15 days, and will be
and May as well as choppy markets, valid for a period of one year," he said. ness on need for Cover:
persistency trends were weak across HDFC Life
Viswanand said that Max Life had, in
cohorts as customers utilised the grade June/July, in association with KANTAR, Covid-19 has put the spotlight on the
period in making renewal payments. conducted a survey (India Protection need to insure lives, and the pandemic
"Among the segments, decline was Quotient -Express), and the findings could well be the "penny drop" moment
seen in persistency in ULIPs, while im- prompted the launch of this rider. As for an industry that had hitherto
proving trends were observed in pro- many as 41 per cent of the respondents struggled to sell protection products in
tection," it said, adding that most in- said they would purchase term plans a country with one of the lowest rates
surers indicated that renewal trends due to an increase in the spread of of insurance penetration among large
were gradually picking up and better Covid-19. Additionally, the survey also economies.
trends would be seen in the coming highlighted that when "There is now a slow realisation dawn-
quarters. V Viswanand, Deputy Managing Direc- ing that if you start early, the policies
In the first quarter this fiscal, 13th tor of Max Life Insurance don't cost much,"Vibha Padalkar, CEO
month persistency declined for SBI Life confronted by the thought that Covid of India's biggest private sector life in-
Insurance to 81.6 per cent from 86 per could prey on the individual and/or surer HDFC Life NSE 0.64 % , told ET in
cent last fiscal and to 87 per cent from an interview.
family, 31 per cent of the respondents
90.1 per cent for HDFC Life in 2019-20. in metros and 20 per cent in Tier 1 cit- "This is a penny-drop moment for life
ies said they bought a life insurance insurance, especially for term prod-
Max Life launches Covid with Covid-19/ critical illness rider. ucts," she said. "We always compare

one-year term rider Keeping these insights in mind, the how Chinese insurers have over 50%
MaxLife Insurance CompanyLtd (Max Covid-19 rider by Max Life seeks to help share of term protection while for In-
dia on a weighted premium basis, it is
Life), has come up with a 'Covid-19 customers protect their financial fu- in single digits. This could change with
one-year term rider' to help customers ture by enabling them to continue in-
(18 to 65 years) looking to protect vesting in life goals, while also protect- the pandemic and we are definitely
themselves against the pandemic. ing their immediate future by attach- feeling a pull."
ing the one-year rider to their base While demand for life insurance has
This is the life insurance industry's first
plan, he said. picked up due to the pandemic, there
rider for Covid-19 and offers both diag-
nostics benefit (fixed lump sum of 20 per On the business performance of Max Life is also the question of the economic
cent of rider sum assured) and also death during the first quarter this fiscal, impact of the virus on the spending
cover due to Covid-19 (100 per cent of Viswanand said that the market share of power of consumers.
sum assured), V Viswanand, Deputy the company in the private sector im- The penetration of India's life insur-
Managing Director, Max Life, told. proved to 11 per cent with Rs. 660 crore ance market at 3.7% is quite low
of annualised premium equivalent. against the global average of nearly
The newly launched rider, which
comes with an annualised premium of "Growth came from our proprietary 7%, pointing to significant growth pros-
Rs. 320 ( including GST) for a sum as- channel. While agency channel saw pects for low-premium protection cov-
sured of Rs. 1 lakh, can be attached to 5percent growth, ecommerce saw 31 ers. Padalkar said that the industry
12 of Max Life's existing products rang- per cent growth year-on-year. The would also have to realign financial
ing from term plans, savings and in- demand for pure terms plans and pro- strategies and innovate to stay on top
come plans to retirement plans. tection fuelled the performance. of consumer behaviour shifts brought
about by the pandemic.
"For diagnosis we have kept it very "While the private sector witnessed 23
simple. We look for Covid-19 report per cent degrowth, we saw 4 per cent "Endowment plans give topline, and
from authorised laboratories. No medi- degrowth in new business premium in other products contribute to the
cal bills are required or no home quar- Q1. Our degrowth was marginal when bottomline," she said. "Protection, for
antine proofs. Lump sum is provided compared to the entire private sector," example, if done sensibly, can be quite
upfront on diagnosis. he said. a high profitable business. However,

20 The Insurance Times, September 2020