Page 29 - Insurance Times August 2021

Future / way forward for microinsurance Illiteracy and non-availability of banking facilities, lack of
structured insurance schemes or timely advice leave the
in India poor people helpless and they face the fury of nature. Micro

India is a country with a population of around 1.3 billion. It insurance is a solution for addressing these problems along
is also estimated that around 40% of the actual total with proper awareness.
population live below poverty line (BPL). Though there are
some different Govt social security schemes for this Technology is already playing and going to play huge role in
vulnerable section but because of the reasons mentioned terms of various innovative products like sachet products,
earlier and due key changes in technology transformation better customer awareness and engagement, innovative
they are yet to avail the benefit of the same. distribution models and faster claim settlements.

The Govt gave a big push in 2014 through the Pradhan Customer centric approach, affordable pricing & ease of
Mantri Jan Dhan Yojana by opening no-frill bank accounts & transacting business are the three crucial points which can
providing subsidised life & personal accident policies. The help insurance companies making good inroad. Fortunately,
implementation of Pradhan Mantri Jan Aayush Yojana the new technology is making all these three converge at
(Aayushman Bharat) in 2018 there by covering around 50 one place. The growing use of tech based third party
crores individual under family floater heath cover gave a big distribution network is a reality giving a good cost arbitrage
fillip to the realization of universal health coverage. to the insurance companies. The new age #fintech &
#insuretech venture are bringing new opportunities.
Both these schemes are technology driven & there are very
less manual intervention. Success in such mass scheme & We have started witnessing the disruption in insurance
the benefits seen by the people have added trust element industry & the days are not far away when the existing
in insurance schemes & helping a lot. protection gaps would be a matter of history. T

Life insurance premium improves after dip
The life insurance industry saw an improvement in premium collection in June after witnessing a 5.5 per cent drop
the previous month as economic activities picked up in states amid falling Covid-19 cases. The new business premium
(NBP) of life insurers - 24 in total - rose 3.95 per cent year-on-year (YoY) to Rs 30,009.48 crore. NBP is the premium
acquired from new policies in a particular year. The yearly group renewable premium, which jumped almost three
times, aided the growth.
But when compared to the pre-pandemic period (June 2019), the NBP still lags by as much as 6.9 per cent. On a
month-on-month (MoM) basis, though, the collection jumped 131 per cent. In May, life insurers had amassed NBP
of Rs 12,976.99 crore. Private insurers - 23 in all - have taken the lead when it comes to growth in business. In June,
the private life insurance companies collected NBP of Rs 8,213.19 crore, up 33.94 per cent YoY and 32.23 per cent
over June 2019 (pre-pandemic) period. On an MoM basis, the mop-up has doubled for the private sector companies.
Insurance attracts more than 40 percent FPI

The insurance stocks attracted more than 40 per cent of foreign portfolio investor (FPI) flows into the domestic
market in June. Overseas investors pumped in a total of $2.35 billion last month, of which $0.97 billion got invested
in insurance companies, says a note by IIFL Securities. After insurance, the automobile and banks & financial stocks
the maximum inflows at $371 million and $341 million respectively.
Insurance isn't a big sector by weight, accounting for just 2.5 per cent of FPI corpus. In comparison, nearly a third of
FPI investments in the country are in the banking and financial sector. Experts say the unusually high investment in
the insurance sector was on account of the large block trade in HDFC Life Insurance Company. In June, Standard Life
divested 5 per cent stake in HDFC Life Insurance Company to raise about Rs. 6,784 crore. Market watchers say the
share sale saw healthy demand from FPIs.

"Insurance was on of the key beneficiaries of the inflows with block deals driving a major part of it. Even after adjusting
for the value of blocks, the net inflow was pretty encouraging," said Sriram Velayudhan, vice-president, IIFL Securities
in a note. He added that the FISE rebalancing led to an increase in FPI flows in the auto sector.

The Insurance Times, August 2021 29