Kotak Mahindra Life Insurance Expects Q1 Loss As Death Claims Jump During Covid
Kotak Mahindra Bank Ltd. has said that its unlisted insurance subsidiary has seen a spike in death claims during the second wave of Covid-19 and is expected to report a loss.
Kotak Mahindra Life Insurance Co.’s estimated claims net of reinsurance for the quarter ending June is expected to be “significantly higher than expected”, according to the lender’s exchange filing. It expects to incur an estimated loss of Rs 225-275 crore for the quarter on account of increased claims and higher mortality related provisioning.
India saw a much deadlier second wave of the pandemic that left hospitals overwhelmed, forcing people to turn to social media for help for everything from oxygen to emergency medicines. More than 1.2 lakh peopled died of the virus in May alone. The number of new confirmed infections has, however, since declined.
Life insurance claims had spiked even before the second wave. The Life Insurance Corp., the nation’s largest life insurance, saw the number of death claims jump 21% in April-December 2020.
Kotak Mahindra Bank said while its insurance arm continues to have a strong capital and solvency position, provisioning assumptions are expected to alter depending on mortality trends.
(Corrects an earlier version that misstated that the insurer informed the market regulator. It informed exchanges)