India poised to have the fastest-growing insurance sector among G20 nations
Agencies
Synopsis
India is predicted to have the fastest-growing insurance sector among G20 nations for the next five years to 2028, with a real-term growth of 7.1% in total insurance premiums. The life insurance segment is expected to expand 6.7% due to increased demand for term life coverage and the adoption of Insurtech.
By Shilpy Sinha, ET Bureau
India is poised to have the fastest-growing insurance sector among G20 nations for the next five years to 2028, with the real term growth of 7.1% in total insurance premiums, a Swiss Re report said.
On the non-life front, premiums are likely to grow at an annual average of 8.3% during 2024‒28, driven by economic growth, improved distribution channels, government support, and favorable regulatory conditions.
However, macro dynamics such as high-interest rates and inflation will present some headwinds.
India's economic buoyancy is helping the growth of insurance market and Swiss Re forecasts for the next five years (2024‒28) predict a real-term growth of 7.1% in total insurance premiums, outpacing global, emerging, and advanced market averages.
India’s economy will outpace that of other major economies supported by private consumption and fixed investment. On the inflation front, Swiss Re estimates consumer price inflation in India to cool to 5.7% in 2023 from 6.7% in 2022 due to monetary policy tightening.
The report said that Indian government and insurance regulator have taken substantial steps to aid the industry growth. The mission "Insurance for all by 2047," launched in November 2022, will help in expanding insurance coverage.
However, India faces challenges in mitigating natural catastrophe exposures. The nation is susceptible to earthquakes, floods, tropical cyclones, droughts, and wildfires, with 93% of exposures remaining uninsured.
The industry faces challenges in bridging the protection gap from limited awareness of risks to underwriting. While progress has been made in establishing early warning systems for tropical cyclones, more work is needed for other hazards like floods. However, there is need for granular data on existing natural catastrophe exposures and robust modelling capabilities, Swiss Re said.
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The life insurance segment is expected to expand 6.7% over the period, aided by increasing demand for term life coverage among the middle class and the adoption of Insurtech by the industry. On the non-life front, premiums are likely to grow at an annual average of 8.3% during 2024‒28, driven by economic growth, improved distribution channels, government support, and favorable regulatory conditions.
However, macro dynamics such as high-interest rates and inflation will present some headwinds.
India's economic buoyancy is helping the growth of insurance market and Swiss Re forecasts for the next five years (2024‒28) predict a real-term growth of 7.1% in total insurance premiums, outpacing global, emerging, and advanced market averages.
India’s economy will outpace that of other major economies supported by private consumption and fixed investment. On the inflation front, Swiss Re estimates consumer price inflation in India to cool to 5.7% in 2023 from 6.7% in 2022 due to monetary policy tightening.
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The report said that Indian government and insurance regulator have taken substantial steps to aid the industry growth. The mission "Insurance for all by 2047," launched in November 2022, will help in expanding insurance coverage.
However, India faces challenges in mitigating natural catastrophe exposures. The nation is susceptible to earthquakes, floods, tropical cyclones, droughts, and wildfires, with 93% of exposures remaining uninsured.
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The industry faces challenges in bridging the protection gap from limited awareness of risks to underwriting. While progress has been made in establishing early warning systems for tropical cyclones, more work is needed for other hazards like floods. However, there is need for granular data on existing natural catastrophe exposures and robust modelling capabilities, Swiss Re said.
(You can now subscribe to our Economic Times WhatsApp channel)
