Page 12 - Insurance Times October 2020

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Growth in Insurance sec- "The economy is on a recovery path Aided by a fall in interest rates, the

tor to double by FY21-end: and the upcoming festive season participating policies have become
should add to the momentum, al-
popular among customers and Kumar
LIC MD Raj Kumar though the sustained spread of Covid- predicts an uptick in demand for guar-
The life insurance industry, has wit- 19 virus poses a downside risk to short- anteed annuity products and partici-
nessed huge degrowth in business in term and medium-term growth rates," pating policies, going ahead.
the first quarter of the current finan- Kumar said. While health claims due to coronavirus
cial year due to pandemic. With the Due to the pandemic, experts have said are seeing a rapid increase, life com-
worst behind, the life insurance sector there is a pick-up in demand for term panies have not had to worry too much
is expected to get back to double-digit products. Acknowledging the notion, about death claims arising out of
growth by the end of this fiscal year Kumar said, "We are seeing a surge in coronavirus deaths. This comes despite
(FY21), said Raj Kumar, managing di-
rector (MD), LIC. interest for pure insurance or term as- India recording more than 100,000
surance and annuity products among deaths due to the deadly virus.
Growth of the industry had fallen by 19 the insurable population." The corpora-
per cent in April. But it revived, and by tion has seen growing interest for its As of October 1, the corporation
August end, the insurance industry has online term products, and expects to settled Covid-related death claims of
shown positive growth of 2.4 per cent sell around 40,000 policies in FY21. 523 families under 1,099 policies
compared to the same period last year. amounting to Rs. 49.58 crore.
While life insurers clocked a positive The Insurance Regulatory and Devel- LIC, which is one of the largest inves-
growth rate of 2 per cent, non-life in- opment Authority of India (IRDAI) is tors in the equity markets, believes
surers saw 3.6 per cent growth. looking to bring in a standard term there is good upside left in the remain-
As far as LIC is concerned, by Septem- product to increase the protection ing part of this fiscal year. It has in-
ber-end, it has seen a 23.55 per cent quotient in the country that all life vested more than Rs. 49,000 crore in
growth in first year renewal premium companies have to offer. This step by the equity markets and will take fur-
income and 4.71 per cent growth in the regulator, according to Kumar, is ther purchases as per emerging oppor-
first year premium income over the last aimed at bringing some uniformity to tunities.
year. the term products offered by insurers. "As of September 2020, we have al-

Growth in composite first year pre- "While it will definitely help the cus- ready invested Rs. 2.63 trillion in gov-
mium, underwritten by the life insur- tomer to compare term products of ernment securities, state development
ance industry in September, is 26.47 different insurers, effectiveness in driv- loans, corporate bonds and equity. In
per cent while for LIC it is 30.12 per ing demand for the term products will the remaining part of this fiscal year,
cent. LIC has seen growth of 12 per ultimately depend on whether the stan- we plan to invest at least Rs. 2 trillion
cent in renewal premium during this dard term product fits into the pros- in various investment instruments,"
period. pects' insurance needs," he said. Kumar said.

The Insurance Times, October 2020