Covid-19 An Inflection Point For India’s Insurance Sector, Says HDFC Life CEO
There will be very muted growth, if at all, for the insurance industry in the first quarter of financial year 2020-21, according to HDFC Life Insurance Company Ltd.’s Vibha Padalkar, but the Covid-19 pandemic may serve as an inflection point when Indians realise the importance of insurance.
“We as a sector are seeing a grinding halt, or a slowdown in new policies, at least in the last one week,” Padalkar, managing director and chief executive officer at the private insurer, said in an interview with BloombergQuint.
India is on the seventh day of a nation-wide lockdown imposed to contain the coronavirus outbreak. There are 1,251 confirmed cases of infection so far, including 32 who succumbed to the respiratory illness.
Even though there is demand for protection products amid the spread of Covid-19, there are operational challenges in selling and servicing insurance products digitally, Padalkar said.
HDFC Life does 9 to 10 percent of the medical reports required for their policies via telemedicine. But Padalkar does not think it can be ramped up beyond 15 percent currently because policy holders, especially the older ones, would have to undergo some kind of medical test or the other.
The other reason for the slowdown, according to Padalkar, is the fact that people have “bunkered down” and are conserving cash. But she expects a “paradigm shift in how people view insurance in India”, once they are past the immediate scramble to survive.
“We’ve been talking about an inflection point, when the average Indian realises that insurance is almost as essential as bread and butter... specially pure health and pure life insurance. That penny dropping moment is this,” Padalkar said.
WATCH | HDFC Life’s Vibha Padalkar On Coronavirus' Impact On Insurance Sector