'Preference for term policies has gone up during COVID-19'

Speaking to Eendu, Prashant Tripathy, Managing Director and Chief Executive Officer at Max Life Insurance, has said that the data suggests that consumers are now preferring investing in term policies over tax saving products to secure the future of their loved ones in these uncertain times. Broadly, insurance policies are categorized into two – pure protection products and those are meant for availing tax benefits.

Hyderabad: The COVID-19 pandemic has started influencing consumers choices and the insurance sector is not an exception.

Speaking to Eendu, Prashant Tripathy, Managing Director and Chief Executive Officer at Max Life Insurance, has said that the data suggests that consumers are now preferring investing in term policies over tax saving products to secure the future of their loved ones in these uncertain times. Broadly, insurance policies are categorized into two – pure protection products and those are meant for availing tax benefits.

He also said this trend would act as a catalyst for the growth of the industry in the near future.

Commenting on the industries growth perspective Prashant said "While it is too early to comment on the industry being on a growth path, we do expect the Indian life insurance industry to grow at a healthy rate of 12-15 per cent over long term, once the current situation stabilizes. This growth will be fuelled by the demand of protection and guaranteed products which will increase due to the impending situations."

Focus on Digitalization

Prashant also said that the insurance industry has now started digitizing its operations and is further expecting to make more investments in digitalization.

"This sector which primarily banks on branch walk-ins, agents, and customer meetings, has now proactively digitized operations to deliver a seamless customer journey. This trend of enhanced digitization and lessened physical touchpoint is here to stay, where the industry expects its customer base to also step up and embrace the full potential of digitization to do better business."

"As the next step, the industry is expected to make more investments in digital selling and workforce management, thus eyeing the covid-19 situation as an opportunity to strengthen its digital capabilities," he added.

Need for GST Reduction

Speaking on the necessary steps to fuel growth in the domestic insurance industry, Prashant urged for a reduction in the Goods and Services Tax (GST).

"While the regulatory body (IRDAI) has announced eKYC to enable insurers to offer smooth customer journeys while maintaining social distancing, the industry requires some more impetus being given to domestic insurers to further the ease of business. Additionally, a reduction in the minimum margin requirement or GST will stir growth in the life insurance sector."