By Dominick Rodrigues
Mumbai, Dec 30: Insurance business activity — especially during the Covid-19 period this year — has transformed into the “new shifting normal” and, while business numbers in the economy bouncing back are expected to be better in 2021, the Life insurance industry has successfully ensured uninterrupted services to its customers, according to G Murlidhar, MD&CEO, Kotak Mahindra Life Insurance Company.
“This industry plays a crucial role in nation-building by mobilising public savings into long-term investment, which represents capital available for funding long-term projects for economic growth. In the Covid-19 scenario, the industry did a quick turnaround by shedding off legacy processes and systems to become more digital, agile and closer to the customer,” he told mediapersons at a virtual Annual Media round-table meeting in Mumbai today.
“India is a highly under-penetrated market with life insurance penetration at under 3%. Demographical factors continue to be favourable with a young population and growing working age group, increasing incomes, and an under-penetrated market. Within financial savings, insurance has been an important instrument for long-term savings. Approximately 23.2% of total household financial assets are in a Life Insurance fund.”
Replying to questions during the webinar, Murlidhar said “Working in the Pandemic meant that we had to “retool” and thrive with the new normal being “Never waste a crisis” and by providing laptops to staff working from homes to service customers in record time. Kotak Life got 50% contributions from the industry business through its continuity on all three fronts: employees, customer and distributors.”
“+Retooling+ meant providing instant service solutions through our Insta Group (made live in April); Chatbots (to handle customer queries), Reengineering processes (going paperless); provisions of video call facility and personalized offerings, empowering distributors tom flourish in the new normal with a bionic edge, and upgrading our Apps.”
“During the covid-19 period, we introduced two new products including one where payment was made on the disease being identified. We have settled 618 claims amounting to Rs 55 crores upto December 2020. Our PAT was up 20% at Rs 332 crore, Solvency Ratio at a healthy 300% and AUM grown by 19% at Rs 39,364 crores.”
“However, insurance protection prices have been pushed by insurers in this period with the products becoming more competitive amidst increasing value propositions,” he said while noting that any acquisitions adding sensible value would be considered.
“Kotak Mahindra Life Insurance Company Limited (KLI) covered over 8.5 crore lives till date since commencing operations on January 10, 2001 through 245 branches in 149 cities (as on 31st March 2020) and a consistent profit track record for 12 years in a row (as on 31st March 2020) while maintaining a balanced distribution mix comprising: Bancassurance, Agency, Brokers, Corporate Agents, Direct Channels and Group Insurance,” he said.
“Individual New Business Premium (NBP) for YTD Sep20 period was Rs 46,839 crore with y-o-y growth of 1%. Kotak Life (KLI) grew by 16% y-o-y in the same period and, on APE basis Industry growth was (-) 7% y-o-y for YTD Sep20 (KLI 2% YoY). We expect the full year industry growth to be flattish or slightly positive.”
“We expect the industry to sustain growth rates of around 15% levels — significantly higher than growth rate of the overall economy – and the key factors driving this are increasing customer awareness and willingness, preference for transactions through digital platforms and the ability of insurers to deliver personalised offerings.”
“With covid-19 claims rising, we face a challenge of supply of ‘reinsurers’ who are becoming quite ‘cautious.’ However, with Covid-19 cases coming down and mortality trend not expected, we don’t expect many covid claims,” said Sunil Sharma.
Kotak’s recent launches include: Kotak Health Shield, Kotak Wealth Optima Plan, besides Kotak Lifetime Income Plan.
