Page 16 - Insurance Times July 2022

investment plan (SIP). In a direction to the government's estimated total for deaths has been. Then, using data on
the Association of Mutual Funds in pre-pandemic 2019. Taken together, new individual policies sold in 2019 and
India, SEBI had told the industry body these numbers significantly exceed the 2020, they conclude that through- out
to notify its members to not bundle government's official number of 2020 and 2021, the number of policies
insurance facility with new MF 4,81,000 (0.481 million) Covid-19 in effect is likely not very different
schemes and also discontinue the deaths in 2020 and 2021," stated the from the number of policies in effect
option in existing schemes. paper. in earlier periods.
Insurance benefit was usually Their method is based on the Using the data, they calculated the
combined in SIPs started in equity and assumption that the ratio of death estimated number of deaths during
hybrid plans, and the asset claims settled to the number of deaths 2020 at 86.81 lakh.
management company paid the life registered in 2020 and 2021 is similar
However, the actual deaths registered
insurance which is usually very low to that during 2016-19, since the ratio
in 2020 were just 81.5 lakh. Thus they
given the huge volume generated. has remained quite steady - 24.53% in
estimate that 5.6 lakh or 0.56 million
2017, 24.12% in 2018, and 23.68% in
In a bid to make investors continue deaths are missing from 2020 death
2019.
with SIP for a longer term, MFs have registration data.
started combining insurance with For 2020, the authors used the actual
schemes. Since most of the large fund death claims settled to estimate the
HDFC Life urges IRDAI to
houses have an insurance company missing death registrations.
allow life insurers sell
within the group, it was sort of
"This is hard data, not an estimate,"
additional business for them. other financial products
stated the authors. Based on partially
available data, the authors state they HDFC Life Insurance Co is in talks with
Pandemic leads to excess have conservatively estimated that the the Insurance Regulatory and
number of death claims likely to be Development Authority of India (IRDAI)
deaths in 2020 & 2021 at
settled in 2021 would be about 3.003 to allow life insurance companies to
4.7m million. "There is a process that sell other regulated financial products,
A new research paper based on connects 'claims settled' and 'deaths Deepak Parekh, chairman of the life
insurance policy claims data estimates registered'. The chain of events insurance company, said at the 22nd
0.56 million excess deaths in India in leading to a death claim being settled annual general meeting. The move will
2020 and 4.15 million excess deaths in is: (i) an insured person dies; (ii) the help enable insurance companies to
2021, or a total of 4.71 million excess death is registered and documentation expand their reach and also improve
deaths in the pandemic years. obtained; (iii) a death claim is filed customer experience.
with a life insurer and is settled by the
The calculations in the paper are There are 24 lakh insurance agents
insurer based on the evidence of death
based on death claims settled by all life registered with life insurance
(for example, death certificate
insurers as reported by the Insurance companies, which provide a significant
produced through the registration
Regulatory and Development source of income for a large number
process)," explained the authors.
Authority till March 2021, death claims of agents, Parekh said.
settled by Life Insurance Corporation of They give a disclaimer that they did
"I would also like to thank our
India in April-December 2021, and civil not find data to estimate the
regulator, the IRDAI, for its continued
registration system data on death proportion of death claims settled to
guidance and support to the industry
registration in India during 2017-20. the actual number of lives lost to
in these challenging times. I am
account for a person with multiple life
"Based on an entirely different data confident that the insurance regulator
insurance policies.
source (life insurance claims), we show will continue to display its firm
that death registrations in 2020 were The paper argued that death claims commitment to carry out reforms for
likely short by 0.56 million. We also settled are a good proxy for death increasing insurance penetration and
contend that there were likely 4.15 registrations given how steady the facilitating sustainable growth of the
million additional deaths in 2021 than ratio between claims and registered industry," he said.

16 The Insurance Times, July 2022