Business, Companies

The systematic investment option in unit-linked insurance plans (Ulips) is getting popular among customers, said Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance.

He explained that Ulips as an instrument are back on track with the market nearing its peak.

A survey by Bajaj Allianz Life has shown that two out of three Indians intend to invest in Ulips in the coming year. Further, the survey showed that the affinity towards Ulips has increased for 9 out of 10 investors, post the first wave of the pandemic.

“Our recent survey also pointed out that systematic investment option in Ulips is getting popular. The age group of 1-30 years is actively looking into Ulips as a key product in their investment bucket,” he said.

Business, Companies

He told Moneycontrol that the share of Ulips in the business mix is at 40 percent at present as against 35 percent a year ago.

While there were concerns about the Budget 2021 proposals affecting Ulip sales in India, Chugh said that there has been no impact.

Earlier, the maturity proceeds of Ulip policies were tax free irrespective of the premium paid. However, Budget 2021 has said that this tax exemption will be applicable only on the maturity proceeds of Ulips having an annual premium up to Rs 2.5 lakh.

“The budget announcement on Ulips proposal did not make an impact. Customers are not investing for tax reasons. It is a dedicated long term investment plan and helps getting an exposure to the economy,” he added.

When it comes to the overall business, Bajaj Allianz Life has declared bonuses amounting to Rs. 1,156 crore to its policyholders. This includes a special one-time bonus of Rs. 315 crores, which is over and above the regular bonus.

Chugh said that the company had made good capital gain in equity and debt and hence announced this one-time bonus on par plans.

The bonus declared is applicable for the policies of all par products, which are in force for full sum assured as on March 31, 2021, and for which customers are paying premiums regularly.

The one-off special bonus and the regular reversionary bonus are payable at the time of maturity or death of the policyholder.

COVID-19 claims and provisions

Chugh explained that in Q1FY22, the insurer has received more than 1,600 death claims amounting to around Rs 116.97 crore.

In its investor presentation following parent company Bajaj Finserv Q1 results, Bajaj Allianz Life had stated that the total reserve (net of reinsurance recovery) for probable COVID-19 claims stands at Rs 304 crore as against Rs 98 crore as of March 31, 2021.

“We have been increasing the provisions. Yes, the COVID-19 claims have gone up and we are studying the pattern closely,” he added.

On the business front, annualised premium rose to Rs 5,960 crore in Q1FY22 as against Rs 3,993 crore in the year-ago period. Annualised premium refers to 100 percent of the regular premium and 10 percent of single premium.

“The growth in business is a combination of multiple levers. We have digitised and virtualised our systems on time. We have added new bancassurance partners and also agents are selling digitally,” he added.

On the branch front as well, he said that the insurer is looking at the concept of high-street branches in prominent locations.

“We are also refiguring the branches. There are digital kiosks for policy servicing while video servicing from branches through mobile can be also be done,” he added.


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