Page 16 - Insurance Times June 2021

The gross written premium increased stint with the ICICI Group in London impact of pandemic deaths is
by 18 per cent to Rs 19,018 crore with and Mumbai leading significant protected to a certain extent from the
the company's embedded value verticals in Asset Management and reinsurance that a life company
totalling Rs 11,834 crore. Corporate & Investment Banking. His purchases.
work experience spans investments in
The operating return on embedded While reinsurers have committed to
bonds, loans, convertibles, equity-
value (RoEV) was at 18.59 per cent, cover the policies already sold, they
including non-operating variances linked instruments and credit are being careful in underwriting new
RoEV at 22.4 per cent impacted by derivatives in investment-grade, covers. Some reinsurers have
COVID-19 provisions. growth capital, special situations and withdrawn from providing covers,
distressed debt. In his last stint, he led
The value of new business was at Rs the creation of a private equity while others have raised their rates.
1,249 crore, up 39 per cent and total "The bigger worry for us could be the
platform focused on investing in possible impact on VNB (value of the
assets under management grew 32 distressed assets and special situations
per cent to Rs 90,407 crore in FY21. new business) margins, as reinsurance
at ART Special Situations. companies bear the bulk of the pain
"In a tough year, we outpaced the since more than 70-80% of retail
private life insurance industry on the Life Insurers witness surge individual protection is usually
back of exceptional digital agility, reinsured. As a result, reinsurance
distribution excellence, and product in Covid claims rates could go up, affecting VNB
innovation strength," said Prashant The current wave of Covid has pushed margins," the report said.
Tripathy, Managing Director and Chief up claims for life insurance companies
Executive Officer of Max Life by 5-10 times for April 2021. This "While near term outlook could be
Insurance. follows 1.9 lakh Covid-related deaths challenging, we are structurally
since April 1, 2021, which is 17% higher positive on life insurance players and
"A balanced product mix of traditional than lives lost to the pandemic in the believe a 20% VNB CAGR (compound
savings-cum-protection plans, unit- entire FY21. "Life insurers, while annual growth rate) is sustainable
linked plans, and pure protection making Covid reserves last year, over the longer term," Macquarie
products delivered robust sales growth assumed 50-100% higher Covid-related research analyst Suresh Ganapathy
and margin expansion, in turn enabling
deaths for FY22. Our analysis shows said in the note.
highest-ever overall sales and value of
that reserves made by them can cover The other impact of the pandemic is
new business."
1.5-2x the Covid-related deaths in that life insurance companies out of
FY21," said a report by Macquarie.
Bharti AXA Life Insurance concerns for employees' health are
The 5-10 times increase in the number going a bit slow on soliciting new
appoints Rahul Bhuskute of death claims is based on enquiries business. At the same time, companies
as Chief Investment Officer with life insurance companies and have been cautious in respect of
Bharti AXA Life Insurance announced industry bodies by Macquarie. The prospective customers' health.
the appointment of Rahul Bhuskute as report says that worry for investors is DPIIT notifies 74 per cent
chief investment officer effective 1st there could be a significant impact on
June, 2021. embedded value for life insurance FDI cap in insurance sector
players. The embedded value is a
Prior to joining Bharti AXA Life, he had measure used to determine the worth under automatic route
a long stint with the ICICI Group in of a life company that factors in future The Department for Promotion of
London and Mumbai leading significant liabilities based on actuarial Industry and Internal Trade (DPIIT) has
verticals in Asset Management and assumptions. notified the government's decision to
Corporate & Investment Banking. increase the foreign direct investment
Of the three listed life insurers - HDFC (FDI) limit in the insurance sector
Rahul Bhuskute is a tenured Life, ICICI Prudential Life Insurance and under the automatic route to 75 per
investment professional with over SBI Life, Macquarie Research has cent from 49 per cent earlier.
decades of experience in creating and projected 2%, 3% and 4% impact,
scaling up significant investment respectively, on embedded value According to a press note issued by the
portfolios in Asia and Europe. Prior to should Covid-related claims for FY22 be department, the decision will take
joining Bharti AXA Life, he had a long four times of FY21. The balance sheet effect from the date of FEMA (Foreign

16 The Insurance Times, June 2021