Business

Kotak Life positive about Insurance industry growing at 15% in the new normal

After the pandemic imposed New Normal phase last year, Life insurance industry today is in the Next Normal phase. This phase has been accentuated by the fundamental shifts in behaviors, both by customers and insurers. The industry had earlier successfully transited the New Normal phase by re-inventing its operating models through digitalization and is now accelerating showing more promise than ever before.

Kotak Life Insurance continues to grow faster than the industry with a 37% growth in its Gross New Business Premiums compared to the Industry growth of 8% YoY as on YTD Nov21. Its Individual business grew by 20% YoY (APE 19%) and the Group business grew strongly by 55% YoY.

FUTURE OUTLOOK

From the current Next Normal phasethe industry will graduate towards a Never Normal phase where every customer’s unique financial needs will be addressed by Insurers through a combination of hyper personalized offerings, simpler journeys and processes.

The anticipated improvements in key economic factors such as

  • GDP growth estimated to be 8.4% in FY22 10.3% in FY23
  • Rise in Household financial savings from 11% of GNDI in FY20
  • Increase in share of Insurance in incremental financial savings (currently 14%)

will aid the growth of insurance industry. We expect Insurance industry to grow at a healthy rate of 15% CAGR –higher than overall economy on the back of:

  • Increasing awareness with higher perceived value for insurance
  • Insurers leveraging technology for a faster and wider reach coupled with personalized, simple solutions available with just a few clicks
  • Favorable demography with young and growing working population
  • Rising income levels

In anticipation, Kotak Life, which had already significantly strengthened its digital enablement and adoption last year, is aiming to leverage its digital assets to offer holistic solutions for its customers. Kotak Life’s strategic direction in its journey towards the Never Normal phase is as below:

– Scale the primary channels whilst maintaining a balanced portfolio

– Productivity gains through analytics deployment

– Innovative product solutions to address the new-age customer needs

– Digital footprints scale

– Empower distributors & employees with the contemporary skills & tools

– Retain customers by delivering great value

 

ADVICE TO CUSTOMERS

Our advice to customers is to primarily ensure adequate protection through a term cover of at least 10 times of annual income. In addition to this, we also recommend protection against any health emergencies as these are known to create great financial distress for the family. As a good practice, maintain a balanced portfolio of guaranteed plans, participating plans and unit-linked plans, with a long-term commitment. We also advise customer to plan for their retirement at an early stage and take benefit of annuity plans to lock the higher annuity rates offered by insurance companies.

 

Kotak Mahindra Life Insurance Company Limited (KLI) FACTSHEET

Company Background

KLI is among the top few life insurance companies in India, and one of the fastest growing. KLI covers over 3.4 crore lives inforce as on 30th November 2021

Ø  Commenced operations on 10th January 2001

Ø  Present in 140 cities through 230 branches as on 31st March 2021

Ø  Consistent profit track record for 13 years in a row as on 31st March 2021

Ø  Balanced distribution mix consisting of Bancassurance, Agency, Brokers, Corporate Agents, Direct Channels and Group Insurance

 

Key Financial Highlights of FY2020-21

Particulars Details
Indian Embedded Value (IEV) 9,869 cr.
VNB Margin (%) 28.6%
Shareholder PAT 692 cr.
Asset Under Management 46,518 cr.
Net worth 4,045 cr.
Solvency Ratio 2.90

 

Gross Premium Underwritten Rs Crs. YoY growth
Individual Gross NB 2,945 23%
Group Gross NB 2,619 -12%
Total Gross NB 5,564 3%
Renewal premium  (individual) 5,536 12%
Gross Premium Underwritten (GWP) 11,100 7%

 

Business quality & claims FY21 PY (FY20)
Persistency*    
13th month 89.6% 84.9%
25th Month 79.2% 77.3%
37th Month 72.2% 69.0%
49th Month 67.3% 63.0%
61st month 58.0% 59.7%
Surrender to PH AUM 3.3% 3.9%
Complaints to NB ratio (Nos) 0.37% 0.36%
Claim settlement ratio

§  Individual

§  Group

§ 98.5%

§ 99.4%

§ 96.4%

§ 99.3%

*Persistency figure are reported figures excluding group business

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button