The Effect of Pandemic on Insurance in India

When the income streams started drying up, the crisis driving innovation led the way to business of all insurers across the country.

There was a question making rounds: “Who is driving innovation: the CEO, the CFO or Covid-19?

Needless to answer, the change management became an effortless task.

With the quick widespread of the virus it was obvious to have a remote working set up. We anticipated the lockdown and took quick decisions to enable remote working.

Policies were re-looked and executed overnight. The time lines went down from months to days to hours when it came to digitization. We were accelerating for a mass transition at a pace we never thought of and so did the virus.

The challenges don’t end there, pressure on 3 critical fronts was on the rise.

New business started to trend down in most of the existing products and market segments.

Retail and commercial customers’ first cost cutting measure was insurance, why would someone need a car insurance during the lockdown?  80% of our business is driven by intermediaries, these brokers were struggling to run resulting in fewer new proposals while the renewal rates dropped on the existing policies.

Customers held back EMIs of the premiums may it be commercial or retail ones. In some cases, it was delayed, and in some cases, it is still not paid.  

At the same time, with regulations kicking in, the tenure of certain products was increased with no fee coming in amounting to a drop in the revenue.

We came up with new products that would cater to the needs covering the virus infected people and/or patients with a chance of co-morbidity.

Claims payout for the deaths/hospitalization have increased in certain geographies.

In the wake of COVID-19, apart from claims payout the litigation over policy disputes and grievances were anticipated to rise. Our Whatsapp chat bot came to the rescue and gave a seamless experience for our customers.

30% of our Inbound calls shifted to whatsapp- the initiative was launched a month before the national lockdown. Well! with covid-19, the acceptance of the bot was higher than estimated before the launch. 

Redundancies: Unlike other sectors, BAGIC continues to be a people centric company with no layoffs or pay-cuts to date.

While innovation will take its course, people need to ask these questions in the Indian market segment: In what ways will the pandemic affect my family? What effect will the pandemic leave during and post covid-19? How will the jobs, education, health, social life, birthdays, vacations, travel, anniversaries etc. change?

Most importantly, with the pace of digitization will the jobs be redundant faster than ever? How will the finances change? How will the retirement look like? Do we have the protection to all the above we need in place?

Does existing policy have any relevance due to pandemic?

While people answer those questions new products/services are already on the rise but there are problems too: many insurance products are getting outdated as the needs have changed.  Our statistical analysis of the inbound calls we received at BAGIC clearly outlines the sentiments of the people.

“Do the policies cover the new problems that would arise?  If not, why should one renew?”

Example, is it fair to pay the car insurance premium if the car is parked or used at 30% capacity?

Why should one pay for health cover if it covers surgeries when routine operations are delayed or suspended?

These hard-hitting questions have led to:

  • Personalized health cover policies.
  • Virtual health services have scaled up: our doctor on chat service has helped many patients get free consultations and avoid unnecessary hospital visits.
  • Our social track back application helps people (even non customers) trace back to people who they have come in touch with in case they are infected.
  • Our external issuance of policies is at the peak due to digital initiatives that empower the intermediaries.
  • Self-Assessment –AI Enabled Bot helps customers check the risk of the corona virus infection.
  • Archaic group endorsement processes take time; we have eliminated it with our end to end digital initiative called Saksham.

In conclusion:

As the goal post keep changing every day, it has become imperative for us to keep innovating faster than ever. This has led to the idea of “Destroy your own business” every day that motivates us to disrupt our disruptions.


Mr. K V Dipu

President & Head of operations

Bajaj Allianz General Insurance Company Ltd.


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