KARACHI: EFU Life Assurance Limited has settled death and disability claims of Rs3.86 billion in the year 2020, which is 23 percent higher than the preceding year, according to the financial report of the company.
It said that timely and efficient claims settlement is at the heart of the company’s business.
In 2020, the company settled total death and disability claims of Rs. 3.86 billion (2019: 3.14 billion), an increase of 23 percent.
Out of this, Individual Life claims were Rs1.32 billion and Group Life claims amounted to Rs. 2.54 billion.
Both lines of business have been impacted by death claims due to COVID-19, however the incremental claims are within the mortality fluctuation tolerance levels set by the company.
The company has appropriate and adequate reinsurance arrangements in place to mitigate the impact of these additional pandemic related claims.
According to the results, the company achieved a gross premium (including Takaful contributions) of Rs32.55 billion (2019: 31.75 billion), a slight growth of 2.5 percent.
The gross premium composition was as follows:
Individual Life regular premiums (including Takaful contributions) grew by 4.6 percent, achieving a total premium of Rs.28.72 billion (2019: Rs. 27.45 billion).
Individual life New Business was impacted by COVID-19 lockdowns during which our distribution channels were unable to reach out to retail clients.
The new business premium contracted to Rs6.21 billion (2019: 6.99 billion).
Bancassurance was impacted to a greater degree due to limited banking activities during the second and third quarter of the year, while the Agency Sales force was able to make a positive recovery towards the end of the year.
Renewal premium is a critical indicator of customer satisfaction and grew to Rs. 22.5 billion (2019: Rs. 20.45 billion), a modest increase of 10 percent. Persistency is in the
DNA of the Company and client retention activities continued throughout the year in parallel to the pandemic when various segments of clients found it to challenging to continue their policies.
These retention activities, for both Sale Force and Bancassurance, yielded positive results and both channels, towards end of the year, were able to improve their respective persistency levels.
Group Benefits gross premium, including Takaful contributions, contracted to Rs. 3.23 billion (2019: Rs 3.58 billion).
The Window Takaful Operations of the Company, Hemayah, are in their sixth year of operations and have continued to show good growth.
The increase in demand for Islamic financial products over the years has also benefited the Company’s takaful line of business. During 2020, the Company achieved a gross takaful contribution of Rs. 5.42 billion (2019: Rs. 4.21 billion), registering an impressive growth of 29 percent.
The Individual Family takaful new business was Rs. 2.04 billion (2019: 1.77 billion), a growth of 15 percent. Renewal contribution was Rs. 2.83 billion (2019: Rs. 1.94 billion), recording a high growth of 46 percent.
For Group Family Takaful, the Company achieved a business of Rs. 309 million. (2019: 326 million). Overall the company expects its Takaful line of business to continue its growth trajectory during 2021.