Kotak Life Insurance Co. Ltd. sees a ~15% growth in the Life Insurance Sector

THE INDUSTRY

The industry plays a crucial role in nation-building by mobilising public savings into long-term investment, which represents capital available for funding long-term projects for economic growth.

THIS YEAR

Classified as an essential service, the Life insurance industry has been successful in ensuring uninterrupted services to its customers. The industry did a quick turnaround shedding off legacy processes and systems to become more digital, agile and closer to the customer.

Individual New Business Premium (NBP) for YTD Sep20 period was Rs 46,839 crore with y-o-y growth of 1%. Kotak Life (KLI) grew by 16% y-o-y in the same period.

On APE basis Industry growth was (-)7% YoY for YTD Sep20 (KLI 2% YoY). We expect the full year industry growth to be flattish or slightly positive.

FUTURE OUTLOOK

We expect the industry to sustain growth rates of around 15% levels, which are significantly higher than the growth rate of the overall economy. Key factors driving this are increasing customer awareness and willingness, preference for transactions through digital platforms and the ability of insurers to deliver personalised offerings. Demographical factors continue to be favourable with a young population and growing working age group, increasing incomes, and an under-penetrated market. India is a highly under- penetrated market with life insurance penetration at under 3%.

Within financial savings, insurance has been an important instrument for long-term savings. Approximately 23.2% of total household financial assets are in a Life Insurance fund.

RECENT LAUNCHES

In view of the current demand dynamics, Kotak Life has launched a few innovative plans:

1. Kotak Health Shield – A Non-Linked, Non-Participating, Fixed Benefit Health Plan which covers early or major stages illnesses / conditions related to Cancer, Cardiac, Liver, Neuro and also offers financial protection against Personal Accident - accidental death or disability.

2. Kotak Wealth Optima Plan – a protection and savings-oriented unit linked insurance plan. The plan provides life insurance cover to protect one’s family in case of the policyholder’s unfortunate demise. It also provides the flexibility of choosing premium payment term, investment strategy and investment horizon.

Additionally, Kotak Lifetime Income Plan, an Immediate Annuity non-linked non-participating Life Insurance Plan has now been made available on the Kotak Life’s Group platform. This plan gives the assurance of continuing income throughout one’s life and, in the absence of the policyholder, throughout the lifetime of his/her spouse.

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.

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 crore lives as on 30th September 2020 and has covered more than 8.5 crore lives till date.

 Commenced operations on 10th January 2001

 Present in 149 cities through 245 branches as on 31st March 2020

 Consistent profit track record for 12 years in a row as on 31st March 2020

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

Key Financial Highlights (FY20)

Customer retention