Mumbai: Kotak Mahindra Bank has said its life insurance arm is expected to incur losses ranging from Rs 225 crore-Rs 275 crore for the quarter ended June 2021 because of high number of deaths in India during the second wave of Covid-19. “Due to increased claims and higher mortality related provisioning arising on account of the second wave, the company expects to incur a loss for the quarter ended June 2021 in the estimated range of Rs 225-275 crore on shareholder’s account,” Kotak Mahindra Life Insurance Company said, in a notification to the stock exchange on Thursday.
The company said going forward, the provisioning would depend on the trends in mortality.
“The second wave of COVID 19 has led to an unprecedented increase in fatalities in the country and consequently, the death claims being reported to the Company from May 2021.The foregoing extraordinary development and its potential impact were discussed at a meeting of our Board held on June 16, 2021,” the company said.
“In view of these COVID related developments, we estimate that claims, net of reinsurance, for the quarter ending June 2021, will be significantly higher than expected,” it added.
It further stated that the company continued to have a strong capital and solvency position. Kotak Life Insurance is one of the fastest growing insurance companies in India, covering over 30 million lives nationwide, as on September 30, 2020.
The latest disclosure highlights the burden insurance companies could face in the wake of the Covid pandemic.