We have survived two years of the COVID 19 pandemic. In the last two years, we all have made drastic changes to our everyday lifestyles and how we go about doing things. As soon as we feel the pandemic is about to end, a new variant of coronavirus emerges. No one knows when the uncertainties of the pandemic will cease.

Like every sphere of life, the unpredictability of the pandemic has also been witnessed in the insurance industry. JFM quarters have always been extremely busy and growth months for insurers.

According to data published by Insurance Regulatory and Development Authority of India (IRDAI), the collective sum insurance of life insurance companies grew by 11.36% during the financial year ending 31st March, 2020. Having said this, there was a dip in the new business premium by 32% in March 2020 to ₹25,409.30 crore compared with ₹37,459.36 crore in March 2019.This was mostly due to the unprecedented lockdown and social distancing restrictions. Routine channels of sales were defunct. Pre-issuance medicals took a hit. Newer methods viz. tele and video underwriting had to be spruced up and offered en masse.

JFM ’21 was better as there was a lull in the pandemic and people were rejoicing the end of Covid. Post Holi festival there was a resurgence but by then JFM was almost over.

Most of the policies sold in March before the end of the financial year were, usually, for tax saving purposes. Much of the sale previously was driven by offline physical interaction, which affected the sales of the new policies due to lockdown restrictions. Today online sales through insurer websites and aggregator apps is a rule than exception. Even age old advisors are doing business through mails and social media apps.

With the emergence of the Omicron variant which is spreading at an incredible rate with India already touching 1 lakh cases in the first week of January 2021, we may see strict restrictions like strict social distancing norms and partial lockdown make a comeback. Thus, JFM ’22 already has 3rd wave from Jan 22 onwards.

However, this is unlikely to hit the insurance sales this time as insurance companies are far better equipped not only to sell their policies online but also to underwrite the risk remotely. Tele-MER saw a steep rise during lockdown and it is here to stay. The adoption of using tech by the insurance companies and its sales force is in the right direction but it also leaves many loopholes and errors which may have terrible consequences financially and for future business of the insurance industry.

The uncertainties of the pandemic has made Indians realise the need of life insurance as people have witnessed deaths in communities irrespective of their age and health. Since the need is pure ‘protection’ and not investment (historic reason for life insurance), the financial backing of a term plan has become a necessity to include in portfolios for those who want to ensure financial backing for their families. With the tsunami of new cases emerging and the looming of third COVID wave will result in even fence sitters rushing to get their term life insurance to secure the future of their loved ones.

Underwriting a Term Plan is distinctly different from that of a Non Term Plan (Savings & Investment). Insurers are offering “Profiled Term Plans” targeting very select individuals. With overall entry criteria much more stringent and the number of check points more than conventional plans, underwriting large number of proposals is a challenging and daunting task. The goal is to minimise ‘bad lives’ creeping in! With near 20%+ rise in term insurance premiums non-disclosures are also going to much more rampant as people want a cover – by hook or crook.

The stressors of JFM do not end with underwriting; during JFM, insurers are also striving to achieve zero or minimum pendency of logged in claims. Then, again, JFM witnesses larger number of claims being logged in – difficult to fathom in life insurance. The suspect claims are kept pending till March as people know that insurers will pay out even suspect claims.

Although, JFM is a critical period for the Indian insurance industry, it is also an opportunity to provide significant value for new customers, staff and stakeholders.

INCHES has the broad expertise to leverage medical & forensic insights not only to aid insurers’ efforts in risk mitigation of new business but also help achieve zero pendency and this helping curb losses and inducing growth in business.

To know more about INCHES’ risk mitigation solutions including QC of underwritten cases and Fast Track solutions for pending claims

For more details do contact Abhishek.l@inchesgroup.com