Impact of Covid-19 on Indian Insurance Industry

Abstract

The insurance industry seeks to protect a country’s people, assets and businesses. It works in juxtaposition with a nation’s business performance and asset ownership. Life insurance seeks to protect the livelihoods of people and future earnings, so it has a direct correlation with the earnings of people, their business performance and net worth. General insurance protects assets and businesses and their valuation as well as overall economic activity. Hence, a popular way of measuring insurance seepage is to benchmark it with the GDP of a country. Apart from manufacturing, many businesses have been indirectly affected by the virus. The lockdown imposed since March 24 ’2020 has had a draconian effect on public establishments like restaurants, amusement parks and movie theatres, shutting them down completely with a downfall in their revenues. These establishments require urgent relief from the Government, and the current situation may lead to lower renewals of employee benefit and life and accident policies. Further, the automobile sector which was witnessing a slowdown even in pre-covid period has been hit even more severely. This becomes all the more an issue of concern for the government as automobile insurance sector, is one of the largest revenue sources for the general insurance industry. This paper aims at analysing the impact of covid-19 on health insurance, general insurance, cyber insurance and the operational challenges faced by the insurance industry. Further it will also emphasize on the need of engaging the insurers on digital platforms in order to increase their reach to the targeted population in a short period of time