The Covid-19 pandemic has brought alive the fears of the people. As uncertainty looms, there’s a marked inclination towards increasing protection. The BankBazaar Savings Quotient, a study of the financial behaviour of Indians between the ages of 22 and 45, shows that on one hand, handling emergency health crisis has become the main reason for saving. On the other hand, there is a greater demand for protection products – be it Life or Health.
In conversation with BankBazaar CEO Adhil Shetty, HDFC Life MD &CEO Vibha Padalkar explains that the increased demand for protection and term life insurance in the last 5 months was on expected lines: “We are witnessing the pull of the market. People want to buy. This is a behavior pattern we have seen in other pandemics like SARS or MERS. We’re also seeing that people are no longer bargain hunting.” Padalkar highlights this as a very important aspect, considering that insurance is not necessarily the highest IRR or the cheapest term price. She adds that there is a convergence towards bigger companies, those that have been in a particular space, speak the language, and know the details of their offers. And these trends have offered insight into a very distinct kind of behavior pattern.
Watch the whole conversation here.
Padalkar explains that pattern is more than just an aftereffect of 1 million plus global deaths due to Covid-19 or close to 1 lakh deaths in India alone. It’s not as much about reading the news in the papers as much as realizing it happening to your own circle of influence. “Your neighbor is in a better off position, or an uncle is better off, or a relative says, ‘Oh, you don’t have insurance? What were you doing so far? I’m fully covered’.” Other factors she stresses on includes loss of job and age; when you’re too old, you get rated up. She considers these as a powerful force behind the behavior pattern. She also believes word of mouth to be a driving force over papers, saying, “when the pandemic reaches home, or close to home, that’s when that penny drop moment happens and that’s what we think is largely driving this.”
#ExpertSpeak LinkedIn Live events occur every Thursday, where BankBazaar CEO Adhil Shetty invites industry experts in the finance space to talk about money management, investment, and more, especially in the backdrop of Covid-19.