Comments
Life insurance companies have tightened underwriting norms for group life insurance policies and hiked premium in some cases after the second wave of the Covid-19 pandemic led to a surge in death claims.
While many insurers are seeking medical information or tests for such policies, others have increased premium rates between 15 per cent and 100 per cent.
An additional perk
Group life insurance covers are often taken by companies as an additional perk for their employees.
Noting that Covid-related death claims are still pouring in following the second wave of the pandemic, life insurers said group insurance policies have become challenging as they are not sure about the exposure they have. Re-insurers, too, have increased the rates for such policies.
Sources said many companies are now finding it difficult to renew or purchase such policies for employees due to the high prices. In many cases, insurers have also withdrawn policies. “Group term policies have got risky since the pandemic, especially after the second wave, due to rising claims, risk of anti-selection and co-morbidities that are triggered off due to Covid and can lead to death. As a result, insurance companies have made underwriting more stringent for group term policies, and the pricing has also become more expensive,” said Vighnesh Shahane, Managing Director and CEO, Ageas Federal Life Insurance.
In many cases, insurers are choosing not to launch these policies or are withdrawing them for the time being, he further said.
Ashwin B, COO, Exide Life Insurance, also said underwriting norms for group life insurance have indeed become stricter over the last one year and the pricing has also risen significantly. “This has happened largely after the second wave that saw a steep rise in mortality, especially among the age group of 25 to 55 years, which is the core profile of the group business,” he said.
Insurers were forced to re-look at the group portfolio from two aspects – revise the pricing as reinsurance companies have increased their rates and absolute increase in the mortality experience, he further said.
The group policies are typically renewable annually, so the current pricing and underwriting may be reviewed next year again depending on the experience going forward.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.