Page 31 - Life Insurance Today July - December 2020

including the term insurance policies. Life insurance plays specifically for COVID-19. So it is very much clear these
a vital role in providing social security to the community. companies are in a dilemma what policy they should adopt
The events that take part in the life of an individual are and how they will continue their activities in business
not always according to their estimation. In such events aspects and serving society as well. As the whole world is
there may be an outburst of financial stress which a family fighting against this pandemic and scientist from different
cannot cope up with. Here lies the role of the insurance counties are working tirelessly to find the solution to
policy. Without the peace and security in life no one can protect human society. Insurance companies throughout
concentrate on their business and profession. This the world have contributed a lot to the society and also
concentration will improve productivity which in turn brings they are trying to become an integral part of this battle.
a respectable financial and social status in people's life.
General Insurance:
Apart from the positive impact of COVID-19 on life The main stake of general insurance industry is dependent
insurance sector a question may arise, is it really a positive on industries and businesses such as automobile, travel,
side? From the outer viewpoint the answer is yes. But from hotels and infrastructure. So due to lockdown challenges
analytical mindset of the experts of this industry explore in these sectors could create additional issues. The
that insurers have been facing constrain in continuing to automobile sector has been witnessing a slowdown even
marketing some products as interest rates fall. So it is very before the pandemic. The over 70-day lockdown leading
clear, this pandemic has changed the way people look at to loss of job and pay cuts across most industries. It will
insurance and their changing mind sets forced companies put the purchase of new vehicles on the back foot, push
to twist their product strategies and re-imaginations of down the motor insurance space further.
their operations with prospective and existing consumers.
According to the report published by PWC, that (lack of
Health Insurance: new purchases) would be compensated for by increasing

First and foremost important sector of the insurance should the coverage net of existing vehicles, a vast majority of
be considered is health insurance. According to PWC report which fall out of the insurance net by the third and fourth
which is published during COVID-19 scenario that private years. But that would be difficult to do give the lack of
health insurance scheme covered only 18% of the distribution feet on the street.
population in the urban areas and a little over 4% in the
rural areas which are not as such satisfactory. The risk of During this lockdown period the demand of this insurance
COVID-19 is not currently priced under active products. This has come down because most of the owners are bound to
claim may cause an additional burden on the books of keep themselves into the home and there is a possibility of
insurers if the patents treated themselves outside the vehicle owners considering own damage as a luxury and
Government hospitals. According to the Head of Health retaining only the third party component for a while. Even
Business, policybazar.com the number of claims for Covid- numbers of claims are expected to be low due to lack of
19 is not really hurting insurer as much because the number activity and movement and also lower renewal of policies.
of planned surgeries are down at this moment. But on the contrary different experts from this industry
depicts that this crisis will not continue and it will come to
So this sector which is always in a demand but due to COVID an end as per market experts the industry has seen de-
situation health insurance companies is also suffering their growth in the motor segment by 11% till June. The
business. One positive side has been identified that enquires slowdown will continue for the next one quarter and
about health insurance policies have increased by about 30- hopefully the market will be back in place on the festive
40%. On the contrary due to lack of data related to profile season.
of patents, morbidity rates and the course and cost of
treatment which is required to compensate risk and 2. Literature Review:
determine the premiums for products which are designed Choudhary (2019) analyzed that the financial life planning

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