Impact of Covid-19 Pandemic on Performance of Life Insurance Companies in Terms of Policies Surrendered

Abstract

One cannot imagine life without insurance. In today’s world full of uncertainties, life is always at risk. To be more specific, people have become more health conscious than before. Every life is valuable. The urgent need of financial support to family after demise of the bread earner of family has caused awareness among households. There is a competition among companies to sell their insurance plans in the market. The insurer takes up the plan as per their requirements and future family supporting plans. The real test of companies lies in reducing the number of policies surrendered by the insurer after few time of initial zeal towards policies. The pandemic has recently force people to take up new plans while at the same time surrender them due to their personal reasons or unexplained reasons. The present paper attempts to study the impact of covid-19 pandemic on surrender of policies among the two giant insurance companies of the country, Life Insurance Corporation of India (LIC of India) and State Bank of India Life (SBI Life). The secondary data was collected from company’s annual reports. The claim amount pertaining to surrendered policies has been subjected to paired t test and the result showed that there had been significant difference in policy-surrendered claim value before and after pandemic for LIC of India whereas SBI Life result showed no significant difference in policy-surrendered claim value pre and post pandemic.