Bharti AXA Life Insurance expects 20% growth in business in current fiscal
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Bharti AXA Life Insurance expects 20 per cent growth in business during the current fiscal backed by higher demand for protection and guaranteed plans amid the Covid-19 induced pandemic. The company had witnessed a four per cent growth in business premium at ₹2,281 crore in FY21.
According to Parag Raja, MD & CEO, Bharti AXA Life, the life insurance industry is estimated to grow 12-15 per cent during the current fiscal, as against a single digit growth it had clocked in FY21.
“The current pandemic has forced consumers to shift their mindset when it comes to life insurance as a product category. Pre covid, people generally bought life insurance for tax saving or for some for sort of obligation, but the current humanitarian crisis has forced people to start thinking about this. Our estimate is that the life insurance industry should grow by 12-15 per cent during the current fiscal and we want to outperform the industry growth,” Raja told BusinessLine.
The company’s assets under management grew by 36 per cent and renewal premium grew by 10 per cent in FY-21, which indicates that customers have understood the need for staying invested in insurance products, he said. Close to ₹1,500 crore out of the total premium of ₹2,281 crore was renewal premium.
In FY21, Covid-related claims accounted for nearly 16 per cent of the total 2,874 claims registered. In value terms, Covid related claims accounted for nearly 21 per cent of the total payout of around ₹180 crore. However, in the second wave there has been a sharp rise in claims.
“In the second wave we have already received 60-70 per cent of last years’ Covid claims in the first two months,” he said.
Growing demand
The pandemic has led to a clear shift among consumers to protection products which has hospitalisation and critical illness built into it. Moreover, consumers are not looking for too long term product and instead are willing to pay for shorter duration because of the uncertainty around personal financial position beyond five years.
Protection plans, which accounted for a meagre two-to-three per cent of the company’s total premiums, increased to five per cent by the end of last fiscal. This has further increased to around 10 per cent in the last two-to-three months.
Based on consumer insights, the company had modified seven existing products and launched three new products last year. This year again, it is looking to launch three new products one under guaranteed income platform, one on par platform and for the third one it is waiting for IRDAI’s final guidelines post which it plans to launch an index linked product subject to the regulator’s approval.
“Pure protection products are cheaper. In the new protection plans we launched we gave them option to pay for shorter period of time. We have also introduced some innovative features and giving benefits to clients who are practising healthy habits in the form of a discount,” he said.
Digital approach
According to Raja, nearly 60 per cent of consumers are researching online and purchasing offline and this trend is here to stay.
The pandemic has forced the entire industry to re-imagine business model, particularly the technology and digital solutions offered to both employees and customers. The company has launched a direct to consumer channel apart from its traditional proprietary and partnership channel. This apart, it has also launched WhatAapp servicing for customers to ensure that nearly 90 per cent of services including claims intimation can be done through the platform.
“Digital business, which currently accounts for nearly five per cent of our total sales, is expected to grow to 15-20 per cent in the next three-to-four years,” he said.
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