Covid and the increase in mortality in the second year of the pandemic had led to many international reinsurers raising their rates. Some had even withdrawn from the market in the course of the second corona wave. At the same time, the pandemic has led to greater awareness of life protection, increased demand for new insurance policies, and an improvement in the persistence of those who already had insurance.
“As for health Results (of the pandemic), there may not be enough research at this time. “But in terms of deaths, the mortality variance in our embedded value is positive,” Kannan said. This means that deaths during the period were lower than expected.
According to Kannan, it’s natural for insurance companies to make losses during a pandemic. “If we don’t make a loss for a life insurance company in a hundred-year pandemic, that means they’re not protecting enough lives,” Kannan said. He added that reinsurance companies should also take a similar approach.
“Also, I don’t think mortality risk or a higher-than-expected mortality rating kills an insurance company because the risks are granular. Investment decisions and guarantees can kill a company and we saw that during the global financial crisis. I think reinsurers.” “We should look at this from a long-term perspective,” Kannan said.
According to Kannan, the markets urgently need more capacity in reinsurance. He said companies can be extremely cautious about their risk assumptions but still need reinsurance to relieve capital.
“When there was a price hike in reinsurance, we said that beyond a certain point the price hike doesn’t make sense. So we kept more risk on our books and had capital so we could say we wouldn’t raise the price beyond what we think,” Kannan said.
Kannan, who will retire after his term ends on June 18, said the insurance regulator’s decision to consider issuing composite licenses was welcome because it would allow life businesses access to health insurance. “Outcomes can be better for health and life insurance companies when done together. Morbidity correlates with mortality assessment,” Kannan said.
He added that this would allow life insurance companies to leverage their large distribution for health insurance and encourage customers to take care of themselves. “The third area is insurance technology and fintech, which could be better implemented through partnerships. Innovation can be better in startups than in big companies,” he said.