Page 23 - Insurance Times September 2020

Private Life Insurance

News

ICICI Bank gets exemption other general insurance business Saurabh Bhalerao, Associate Director,
(Bharti AXA General), which if consum- CARE Ratings.
from paring stake in insur- mated would result in ICICI Bank's He also noted that customers may
ance arms for 3 yrs shareholding in ICICI Lombard General choose to defer premium payments or

ICICI Bank Ltd. said it has got exemp- Insurance Company Limited reducing opt for lower value in case of plans
tion from paring stake in its life and to less than 50%," it said. with a higher premium due.
non-life subsidiaries to 30% for a period Santosh Agarwal, Chief Business Of-
of three years. Life insurers face falling
ficer, Life Insurance, Policybazaar.com,
A government notification exempted persistency levels said renewals on protection products
ICICI Bank from the provisions of Sec- Amid signs of recovery in sales, life in- have not been impacted and there has,
tion 19(2) of the Banking Regulation surance companies continue to grapple in fact, been a demand for term insur-
Act, 1949 with respect to shareholding with low persistency levels, especially ance since the pandemic.
above 30% in ICICI Lombard General in market-linked and endowment prod-
Insurance Company and ICICI Pruden- ucts. "On the savings side, both in endow-
tial Life Insurance Company Limited, ment products and ULIPs, there has
Experts and players attribute this to been a slight de-growth in terms of
for a period of three years, the bank
the current Covid led economic crisis persistency. This could be because of
said in a regulatory filing.
and concerns about job losses and sal- affordability due to concerns about in-
The central government, on the rec- ary cuts, along with volatility in mar- come and jobs," she said.
ommendation of the Reserve Bank of kets that have impacted products like
India, issued the notification on Sept. ULIPs. However, there continues to be The IRDAI, too, has urged the industry
9, 2020, it added. demand for protection products, given to ensure 13th month persistency at
Sub-section (2) of Section 19 of the the current uncertainty, they said. least 90 per cent and 61st month per-
sistency at a minimum of 65 per cent.
Banking Regulation Act, 1949 provides "Historically, in the preCovid times,
that no banking company shall hold there has been an uptick in the persis- Insurers are keeping their fingers
shares in any company, whether as tency levels for life insurance compa- crossed about a recovery across these
pledgee, mortgagee or absolute nies. But the pandemic has led to a businesses. With the second quarter of
owner, of any amount exceeding 30% new set of challenges for many custom- 2020-21 now coming to a close, insur-
of the paid-up share capital of that ers. While it has created much more ers will throw more light on persis-
company or 30% of its own paid-up awareness about insurance and led to tency levels in their reporting data.
share capital and reserves. higher demand for term plans and pro- At the recent CII Insurance and Pen-
"As previously announced by ICICI tection products, persistency ratios will sions Summit, IRDAI Chairman Subash
Lombard General Insurance Company, remain under pressure, especially for C Khuntia had said the regulator would
it has proposed an acquisition of an- products that are market linked," said be monitoring these ratios.

The Insurance Times, September 2020 19