India’s insurance sector to experience highest growth among G20 nations

The life insurance market is forecast to grow at an annual average of 6.7% from 2024 to 2028

January 17, 2024

The company anticipates a robust inflation-adjusted growth rate of 7.1% for India's insurance market over the next five years

The expected rise in premiums is attributed to economic growth, an expanding middle class, and regulatory support

Non-life premiums, including health insurance, are expected to expand by an average of 8.3%

The Institute acknowledges India's progress in risk mitigation for tropical cyclones but emphasises the need for further measures

The Swiss Re Institute (SRI), a leading reinsurer, predicts India’s insurance sector will experience the highest growth among G20 countries from 2024 to 2028. The company anticipates a robust inflation-adjusted growth rate of 7.1% for India’s insurance market over the next five years, a figure nearly three times higher than the global average of 2.4%. SRI foresees an increase in insurance penetration (the contribution of insurance to GDP) from 3.8% to 4.5% by 2034.

Despite economic losses in India reaching US$ 8 billion (inflation-adjusted) due to natural disasters in the past decade, insurance protection against such risks remains low, with 93% of exposures uninsured, according to SRI’s resilience analysis. The expected rise in premiums is attributed to economic growth, an expanding middle class, and regulatory support, with the Insurance Regulatory and Development Authority of India (IRDAI) aiming for universal coverage by 2047. Emerging markets, including India, are projected to grow at 5.1% over the next five years, while advanced markets are expected to grow at a slower rate of 1.7%.

Regarding segment split, the life insurance market, constituting about three-quarters of total premiums in India, is forecasted to grow at an annual average of 6.7% from 2024 to 2028. Meanwhile, non-life premiums, including health insurance, are expected to expand by an average of 8.3%.

The SRI acknowledges India’s progress in risk mitigation for tropical cyclones but emphasises the need for further measures, especially for hazards like floods. The institute underscores the insurance industry’s role in providing solutions to manage financial losses resulting from natural catastrophes.

Source: Economic Times

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