COVID-19:Indian insurers resort to lay-offs and pay-cuts

The Indian insurance industry has started laying off employees as the coronavirus' impact on the industry deepens. According to a news report published in the Indian financial daily The Economic Times, online insurance firm Acko Insurance has laid off around 50 employees.

The report said, “Most of the employees laid off are from the customer service, operations, sales and marketing departments. It quotes Acko Insurance founder Varun Dua saying 45 people were ‘impacted’.

Mr Dua said, “These are unprecedented times and we have to be prepared for a situation where the world is not normal for a long time.” He said the leadership team has also taken voluntary salary cuts between 50% and 70% to do what is right in the interest of the majority.

“Some business lines have been impacted and we don’t see them recovering for a long time and we have been forced to rationalise in those areas and consolidate a few teams and roles,” said Mr Dua.

HDFC Life Insurance MD and CEO Ms Vibha Padalkar in a recent interview with Bloomberg Quint had said, “There will be very muted growth, if at all, for the (Indian) insurance industry in the first quarter of financial year 2020-21.”

“We as a sector are seeing a grinding halt, or a slowdown in new policies, at least in the last one week. But the COVID-19 pandemic may serve as an inflection point when Indians realise the importance of insurance,” she said.

Source: Asia Insurance Review