Page 16 - The Insurance Times October 2021

new policies. "The intent was higher in wave, due to rising claims, risk of anti- tank said as the government looks to
emerging Asia (56%), particularly selection and co-morbidities that are expand the investor base and scale up
India, Vietnam and China (70%) versus triggered off due to Covid and can lead instruments to operationalise its Rs 6-
advanced Asia (average: 20%)," Swiss to death. As a result, insurance trillion asset monetisation pipeline.
Re said. companies have made underwriting
more stringent for group term policies, Max Life to expand its use
The improved prospects for insurance
are also reflected in the performance and the pricing has also become more of AI, ML to underwrite
of non-life during the first quarter. Non- expensive," said Vighnesh Shahane, polices
life insurers have registered a 14% Managing Director and CEO, Ageas
growth in gross premium during the Federal Life Insurance. Max Life Insurance, wants to leverage
first quarter as demand for health Artificial Intelligence (AI) and Machine
insurance increased during the deadly NITI Aayog recommends Learning (ML) to ensure that at least
70-75 per cent of the policies are auto
second wave of Covid. streamlining of investment underwritten for retail business, a top

for insurance, pension official said.
Life Insurers review
funds in InvITs This is part of the company's aspiration
underwriting norms for to build an industry-best underwriting
The NITI Aayog has suggested
group life policies streamlining limits for investment by capability that would help it manage
Life insurance companies have insurance and pension funds in underwriting risks better without
tightened underwriting norms for infrastructure investment trusts compromising on issuance speed to
group life insurance policies and hiked (InvITs) to promote active participation customers, Manu Lavanya, Director
premium in some cases after the by investors to fund infrastructure and Chief Operations Officer, Max Life
second wave of the Covid-19 pandemic (infra) projects. Insurance, said.
led to a surge in death claims. Sharing the various facets of the AI/ML
"The long-term nature of infra projects
While many insurers are seeking requires active participation from initiatives of the company that are
medical information or tests for such investors looking at a similar return being embedded in its underwriting
policies, others have increased profile from their investments. and onboarding processes, he said
premium rates between 15 per cent However, the existing investment currently, the company manages to do
and 100 per cent. guidelines for insurance and pension auto underwriting for about 55-60 per
cent of policies. "We are also the only
Group life insurance covers are often funds limit the exposure of such funds company in the industry that does auto
taken by companies as an additional to InvIT/real estate investment trust underwriting for protection (policies),"
perk for their employees. (REIT) assets," the Aayog said in the he said.
guidebook of the National
Noting that Covid-related death claims Monetisation Pipeline (NMP). The key AI/ML initiatives that are
are still pouring in following the second embedded in the processes of the
wave of the pandemic, life insurers said The investment limit for insurance company are Vision AI for fraud
group insurance policies have become funds is currently capped at 3 per cent detection of prospective sales to check
challenging as they are not sure about of fund size of the insurer, and 5 per for existing comorbidities; Using ML for
the exposure they have. Re-insurers, cent of units issued by a single InvIT/ Diagnostic centre fraud detection;
too, have increased the rates for such REIT. Leverage of intelligent ICR and OCR for
policies. Pension funds under the Employees' seamless recognition of onboarding
Sources said many companies are now Provident Fund Organisation are also documents and Intelligent analytics for
finding it difficult to renew or purchase regulated to invest up to a maximum upfront auto underwriting of new
such policies for employees due to the of 5 per cent of the funds in InvIT/REIT. business.
high prices. Mutual funds can invest up to 10 per "These initiatives are driving significant
In many cases, insurers have also cent of their assets under improvement in straight-through
withdrawn policies. "Group term management in a single InvIT/REIT. processing that in turn uplifts our
policies have got risky since the "These need to be streamlined to ability to reduce issuance turnaround
pandemic, especially after the second ensure consistency," the policy think time for the customers," he said. T

16 The Insurance Times, October 2021