Indian insurance sector is generally equipped to handle key loss events including pandemics. However the financial consequences will require time and will be made explicit by the insurer. As owners and claims payers as well as investment executives, insurance companies are responding to the COVID-19 spread on many fronts. CAUSES OF COVID 19 Each of these issues is important not only to the insurance industry, but also to the global economy, and the public.
The Indian insurance industry is facing an unexpected challenge in harmonising its last year's premium growth. It could have been an incredible year. The three most recent financial year months have been traditionally those that witnessed the industry's highest collection.
Due to the lockdown taking place in the final week of April, premium collections are now beginning to suffer. The impact is severe because many cities are currently in lockdown. Customers are not purchasing travel insurance because they have been unable to fly. The lengthy process of buying new policies that require medical tests is time-consuming and can lead to delays. NRIs and people with travel history are exempt from new policies. Overall, the insurance sector has been hurt in many different directions.
Insurers are facing an increased risk of death due to loss of new business and premiums. Although the government was positive and went for a 21-day lockdown, it did not take place until the death toll had risen to double digits. The country's size and early signs that there is community spread cannot be ignored. Insurance agencies consider it premature at this stage to mention exponential augmentation of death claims in insurance. India should be able to control the spread. If not, it could have a less severe impact on claims for life insurance. When it comes to life insurance policies there are a few companies that will still honor existing claims. The price of future policies will increase, and the number of policies with comprehensive coverage could fall. GET MORE INFO