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Covid will take toll on life insurers: LIC chief

M R Kumar, Chairman, LIC
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 M R Kumar, Chairman, LIC

Highlights

Says lockdown has impacted premium collections

Mumbai: The impact of Covid-19 pandemic on life insurance industry would be mostly on its investment income as the financial market volatility had also increased, followed by ULIP as well as pension and annuity business may get impacted severely, said M R Kumar, Chairman, LIC, on Monday.

Addressing an event organized by National Insurance Academy in Pune, he was quick to add that increased awareness among customers would drive the growth of traditional life business. Social lockdown would impact the premium collection as most of the middle and old aged people would find it difficult to pay premiums upfront and may not be interested to interact with the intermediaries personally, he said. However, increased customer's awareness would push the traditional life business like term insurance and endowment positively, he said.Health systems around the world, Kumar said, are at risk of becoming unfit for purpose. New vulnerabilities resulting from changing societal, environmental, demographic and technological patterns threaten to undo the dramatic gains in wellness and prosperity that health systems have supported over the last century, he added.

Non-communicable diseases - such as cardiovascular diseases and mental illness - have replaced infectious diseases as the leading cause of death, while increases in longevity and the economic and societal costs of managing chronic diseases have put healthcare systems in many countries under stress. Progress against pandemics is also being undermined by vaccine hesitancy and drug resistance, making it increasingly difficult to land the final blow against some of humanity's biggest killers, he said.

As existing health risks resurge and new ones emerge, humanity's past successes in overcoming health challenges are no guarantee of future results.

A Swiss Re Institute – Sigma research predicts that global health resilience is likely to worsen as a result of the Covid-19-driven recession. The pandemic has been putting families into kind of financial stress, never experienced before. The health protection gap is likely to cross $588 billion witnessed in 2019.

According to Kumar, one way of alleviating the hardships of households is to build resilience through potent health insurance covers designed as per the population healthcare needs.

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