HDFC Life Insurance has recently said that it has stepped up its reserves on account of COVID-related risks in 2021-22. It had provided Rs. 41 crore as on March 31, 2020 for potential adverse mortality experience due to COVID-19, and now it has increased the amount to Rs. 165 crore for the ongoing fiscal.
Vibha Padalkar, MD and CEO, HDFC Life, remarked, “Based on our actual experience in FY21 and after factoring in aspects such as the latest mortality trends across businesses and customer segments and geographical spread of COVID 2.0, we have provided a COVID reserve of Rs. 165 crore for FY22. We will continue to review the adequacy of the reserve through the course of FY22.”
She also added that while the reserve for the time being is adequate, there is no clarity on how bad the current pandemic is going to be, whether there is a possibility of another wave and how recovery will affect long term mortality rates.
“Given the resurgence of COVID and the looming uncertainty around economic and market momentum, we will continue to maintain a cautiously optimistic stance for FY22 and evaluate our approach dynamically. The current pandemic has led to a higher awareness around the need for protection and the inadequacy of current insurance coverage,” HDFC Life declared in a statement.