Exide Life Insurance expects over 30 per cent jump in new business premium during the current financial year, on the back of higher sales for term life products as well as focus on rider-based plans, a top company official said.
"Last year when the pandemic hit and afterwards people got used to dealing with the new normal, we found that we had an improvement in customers paying their renewal premium.
"We had improvement in persistency figure as well," Exide Life Insurance MD and CEO Kshitij Jain told PTI in an interaction.
He said following the COVID-19 outbreak, there have been a rise for protection policies that the company is selling.
"In the past, we were doing 8-10 per cent of our business in protection policies. But, following the COVID-19 issue last year, we are now doing close to 18 per cent of our business in protection... It's almost doubling," Jain said.
With increasing awareness about term insurance, the company expects this number to go up further.
Its business through agency channels and direct channels is doing well. More sales are happening for relatively larger premium size policies. The small-ticket policies have come down, while the large premium policies have gone up.
"This year, I am expecting a significant growth in our new business premium. Unless something seriously goes wrong, my expectation is that we will grow upwards of 30 per cent in new business premiums (in FY22).
"So, this run rate that we started in April (over 37 per cent growth in new business premium), we hope to continue during the year (as well)," Jain said.
The insurer also witnessed a significant rise in claims settlement in last fiscal.
"We had a rise of upwards of 40 per cent in the number of claims paid out. But, the claim settlement ratio had improved despite the fact that we were in a year where the claims went up significantly.
"Our claims settlement ratio at 98.54 per cent is at an all-time high in 2020-21," said the official.
Of this, the coronavirus-related claims in individual business were roughly 10 per cent, he said adding that there was also a significant uptick in death claims due to heart failures.
"How many claims were brought about by the lockdown environment, I cannot comment. For instance, the number of claims on account of heart failure went up dramatically last year. Is this on account of the fact that people were restricted to home and therefore stressed, we don't have enough data to be able to comment on that," he added.
In 2020-21, Exide Life received 5,050 individual claims, up by about 50 per cent from 2019-20.
"COVID-19 has contributed significantly to the number of claims received in 2020-21. Till March 31, 2021, we received close to 750 COVID-19 claims (individual and group) and we have settled 100 per cent of them," said the insurer.
In terms of total sum assured as of March 31, 2021, the company said it has settled about Rs 40 crore towards COVID-19 claims. "And overall, we have settled claims worth over Rs 322 crore," it added.
Given the surging coronavirus infections in the country and the resultant loss of lives, claims arising out of COVID-19 deaths are accorded the highest priority, Exide Life said.
"About 11.5 per cent of our total claims are on account of COVID-19, and we may witness further increase through the next few months if the pandemic intensifies across the country.
"We are well placed and have made adequate provisions to meet this requirement while also continuing to maintain a healthy solvency ratio," Jain said.
In 2020-21, Exide Life registered 3.26 per cent growth in its gross written premium at Rs 3,325 crore, while the asset under management (AUM) rose by over 16 per cent to Rs 18,381 crore.
It also saw a 16 per cent rise in policyholder bonus payout at Rs 376 crore.
Exide Life, an unlisted company fully owned by India's leading batteries maker Exide Industries, registered a profit before tax of Rs 61.2 crore in 2020-21 as against Rs 29 crore in the preceding year.
The insurer said its efforts of building digital infrastructure over the last 3-4 years paid off during these challenging times.
"We adapted to the changing environment quickly and our services remained accessible without any interruption.
"We are digitally connected with our customers and employees round-the-clock that helps us reach out to them effectively even in these trying times," Jain said.
The company's solvency ratio, a measure of the risk an insurer faces, in 2020-21 increased to 222 per cent as compared with 210 per cent a year ago.
"This year, we will not increase the premium rates. Right now, the priority is to give our customers additional cover, which are called riders in our industry," Jain said further.