Indian Life Insurance branches in jeopardy
As the fog of Covid-19 continues to persist around the globe, approximately 1,000 life insurance branches in India face closure.
Should the closures occur, it would mean that nearly 9% of the country’s life insurance branches, as reported by Asia Insurance Review. In order to compensate for the impact of the pandemic, insurers have enacted several strategies, including the selling of insurance products online through both their own and banks’ websites, or through video calls with customers.
The industry is feeling the strain with the obvious barriers to in-person selling of insurance products barred for the foreseeable future. Predictions have been made alluding to a foreseeable contraction in the insurance market in 2020, a far cry from the 8.8% growth witnesses in 2019.
“As per the latest data, India’s life insurance market is forecasted to grow at a compound annual growth rate (CAGR) of 5.3% during the forecast period 2019-2023,” according to GlobalData, as reported in an article by livemint.
Figures from the Insurance Regulatory Development Authority of India (IRDAI) drove this point home further still, revealing that new business premium in April 2020 declined by 32.6%, compared to the figures posted during the same period in 2019.
“Premium from new business accounts for 42% of the life insurance market. As a result of lockdown, life insurers reported decline of 32.6% in new business premium in April 2020 against the same period last year,” said GlobalData, looking at the industry more granularly.
According to Moneycontrol, an Indian online business news website, those life insurance branches located to major urban areas, namely large cities, are most at risk, due to the significant fall in on-foot traffic and walk-ins.
A CEO of a private Life Insurance company operating in the market said: “Digital has seen a wider presence across the country, especially in metro cities. Hence the idea is to leverage this strength rather than investing into branch real estate.”
As private life insurance firms witnessed a 33.3% fall in new business premium for April 2020, the loss of jobs in an industry which employs 300,000 people in a full-time capacity is arguably unavoidable.
Recommended news