Swiss Re hails India as fastest growing insurance sector among G20

Country expected to grow at a rate of 6.7%, surpassing other major economies.

Source: Reinsurance Business

Swiss Re’s projections for 2024-2028 suggest that total insurance premiums in India will increase by 7.1% in real terms annually, significantly outpacing the global average of 2.4%, as well as the averages for emerging (5.1%) and advanced (1.7%) markets and positioning the country as the fastest-growing insurance sector among G20 countries.

India’s economy stood out in 2023 despite its challenges, with an estimated growth rate of 6.7%, surpassing that of other major economies. The country’s growth trajectory is primarily fueled by private consumption and fixed investment.

Despite these positive trends, the country faces potential economic risks. These include the impact of interest rate hikes, the possible effects of El Nino, rainfall deficits, and geopolitical tensions, particularly in the Middle East, which could affect oil prices.

Life insurance premium growth is estimated to have decreased to 4.1% from 5.9% in 2022. This slowdown is attributed to diminishing pandemic-related risk awareness and recent changes in tax norms affecting high-value policies. However, robust growth is expected in the life insurance segment for 2024-2028, with a forecast 6.7% increase in premiums. This growth will be supported by the middle class’s rising demand for term life coverage and the country’s young demographic, coupled with the increasing adoption of insurtech within the industry.

Non-life insurance premium growth also saw a slight decline from 9.0% in 2022 to an estimated 7.7% in 2023. Factors such as high interest rates and rising retail and medical inflation presented challenges to growth in this sector.

Nevertheless, non-life premiums are expected to grow at an annual average of 8.3% during 2024-2028, driven by factors including economic expansion, improvements in distribution channels, governmental support, and a favorable regulatory environment.

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