The boss of insurance giant Allianz’s Indian branch says 2020 will not be a year of significant growth, but “a year of survival” for insurers in the country.
Bajaj Allianz life insurance CEO Tarun Chugh said the widescale impact on India’s economy caused by the Covid-19 pandemic will make it less likely for people to spend money on insurance premiums.
“I think this is a year of survival, not everybody is likely to invest (in policies) when the GDP (gross domestic product) is not likely to do good. This year will not be a year of significant growth” Chugh told the Press Trust of India.
“Premium for policy will actually come down. Overall on the premium for the life sector, I don”t think it will grow at all.”
Chugh added that the current situation will push insurance companies to adopt to digital and virtual means of product selling going forward – something GlobalData’s Pratyusha Mekala recently predicted.
“Web aggregators such as Policybazaar have reported 20% growth in sales of life insurance products in March 2020,” she said.
“However, growth from online channels is unlikely to prevent contraction in the overall life insurance business.”
His comments appear to square with the views of analysts from GlobalData, who predict the Indian life insurance sector is expected to contract by almost 1% during 2020, caused by disruption to the bancassurance and agency channels, which account for over 90% of insurers’ new business.