BackFacing new-age risk is a big challenge for life insurers: ABSLI's Kamlesh Rao
As of now, covid claims form 12% of the total numbers at ABSLI. A medical report which confirms that the life insured has been diagnosed with Covid are required before settling such claims
PremiumNEW DELHI: Insurance as a concept is based on dealing with uncertainty. Amid the coronavirus pandemic, the growing demand for insurance cover has encouraged insurers to embrace technology and provide cover instantaneously. In today’s era, however, successful digitalisation requires more than just technology innovations. It needs a proper roadmap with definite objectives to provide best solutions to policyholders.
In an interview with Mint, Kamlesh Rao, MD and CEO, Aditya Birla Sunlife Insurance, shared his views on the type of new-age risks that life insurance companies are facing and how they are gearing up to meet the needs of policyholders.
Also Read | How citizen data led India’s covid battle
What are new-age risks and how insurers are facing challenges to deal with them?
Facing new-age risk is a big challenge. Disruption caused by Covid-19 is among of the most crucial risks that insurers face today. It is prudent to acknowledge that such events are becoming more frequent and can impact and disrupt operating models.
Insurers will have to pre-empt such risks to manage them well if not converting these risks to opportunities. Understanding evolving needs of customers and strengthening tech and digital interfaces will help them.
Another risk that has emerged is managing claims well. Knowing the customer and analysing the Insurance Information Bureau (IIB) data will help companies manage such risks better and will bring down fraud-related claims.
Risks related to cyber-security have also seen a rise and thereby it will be prudent for companies to strengthen their security postures. The regulator, Insurance Regulatory and Development Authority of India (Irdai), has already coming up with robust cybersecurity guidelines, much ahead of its time, encouraging insurers to follow a set of security control.
Such steps will augur well for the industry while helping them to manage risks.
How many Covid-related claims has ABSLI received so far?
As of now, covid claims form 12% of the total numbers at ABSLI. A medical report which confirms that the life insured has been diagnosed with Covid are required before settling such claims.
Post pandemic, will the protection segment bound to grow in 2021?
The element of pull has come in the life insurance industry with new customers joining the pool and the old ones questioning the value of their covers. This especially holds true for protection plans or pure term covers, which witnessed growth, despite reinsurers making them a tad dearer.
There hasn’t been any drop-off and it isn’t a temporary offset, the demand for protection covers is still strong and in view of the ongoing uncertainty, this trend will continue in 2021 as well.
Besides bringing in much-needed awareness regarding the need and importance of protection plans, the pandemic provided an opportunity to enhance the digital quotient of the life insurance sector. It also encouraged the requirement of appropriate need-based products and emerged as a profitable insurance operating model of tomorrow.
For the past couple of quarters, these factors have driven growth for the industry. It has been a win-win for both customers and insurers. Not only will it go a long way in fostering better reach and penetration of insurance in the country, it will also allow the industry to grow in the next five years, as much as it did in the last 10-12 years.
Do you see an uptick in awareness or inclination from this segment during the pandemic?
Given the uncertainties due to covid, people in the age group of 28-40 years contributed significantly towards the purchase of protection as well as guaranteed savings products. This reflects the heightened awareness as well as an inclination towards risk-free and guaranteed avenues of growing money.
Moreover, this trend will be here to stay, with a number upside for young people, as more will want to get insured; and a value upside for those who are already insured. Such a populace will strive for a higher value of cover to make sure that they are adequately insured.
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