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Disappointed by COVID-19 deaths, Indians rush to seek life insurance

Like many other twenty-year-olds in India, Beverly Coutinho continued to postpone the purchase of a life insurance policy until an increase in COVID-19 cases and deaths made her face her own mortality.

"I saw people my age die, which led me to receive life insurance immediately," said Coutinho, a 24-year-old senior executive at a Mumbai public relations agency.

"I wouldn't want my family to be in a situation where they have to fight for funds if something happens to me."

The official number puts the number of deaths caused by COVID-19 at 380,000, the third highest after the United States and Brazil, although experts say India's figures are largely underestimated due to low levels of virus testing and probably died earlier. many people in India than anywhere else in the world.

When a second devastating wave of the pandemic peaked in India in April and May, the number of people between the ages of 25 and 35 buying long-term insurance was 30% higher than in the last three months. combined, said PolicyBazaar, India's largest online insurance aggregator.

Term insurance purchases through the online insurance aggregator The InsuranceDekho website increased by 70% in May compared to March.

Insurers did not disclose how many plans they sold citing business confidentiality, but many said it was in the "big thousands."
"The current pandemic has led to greater awareness of the need for financial protection and the inadequacy of current insurance coverage," said Niraj Shah, chief financial officer of HDFC Life Insurance.

Shah's company said it has seen a higher demand for protection products by the under-35 age group since the pandemic first hit India about 15 months ago.

Industry executives say insurance plan investigations have been launched despite the second wave of infections that has disappeared, probably due to the strong prospects of a third wave, given India's slow start to made the mammoth task of vaccinating his humans.

Behavior change
Investors on the stock market still seem uncertain whether buying shares in life insurers is a good bet during a pandemic.

Since the beginning of the year, the NSE Nifty 50 benchmark has gained 13.5%, while shares in HDFC Life Insurance have risen just over 2%, SBI Life Insurance has risen by about 10%, and ICICI Prudential Life Insurance has climbed by almost 18%.

"In the long run, investing in insurers makes sense because it has raised awareness about insurance," said Saurabh Jain, vice president of research at SMC Global Securities in New Delhi. However, he added that high valuations and the increase in the number of claims due to the first and second waves were a concern.
Despite the lack of strong growth in the life insurance market, industry analysts see behavior changing among middle-class families in a country that has traditionally seen low levels of coverage.

"After clothes, food and housing, insurance has now become the fourth pillar for a middle-class family," said Ankit Agrawal, insurance founder and CEO of InsuranceDekho.

The penetration of life insurance among the population of India was 2.82% in 2019, compared to 2.15% in 2001, according to the latest annual report of the Insurance Regulatory and Development Authority.

This is still well below the global average of 3.35% in 2019, but then a large part of India's 1.35 billion people have no income available to set aside for insurance, a situation that has become even more acute. due to the economic consequences of the pandemic.

Long-term insurance plans are popular in India because they are often cheaper and pay the family if the insured dies during the policy payment period, although there is no maturity benefit if they survive the plan. Demand for other types of insurance, including various medical coverage, has also increased.

"If anyone was thinking of buying insurance, they're actually doing it now," said Avneesh Sukhija, a senior financial analyst at BNP Paribas India

Written by saadghufran25

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