India likely to become sixth largest insurance market in next 10 years
1 min read 01 Sep 2022, 06:44 PM ISTIn its latest report, Swiss Re Institute expects the country's total insurance premiums to grow by an average of 14% n nominal local currency terms in the next 10 years.
PremiumIndia is likely to become the sixth largest insurance market in the world over the next decade driven by regulatory push and rapid economic expansion. In its latest report, Swiss Re Institute expects the country's total insurance premiums to grow by an average of 14% n nominal local currency terms in the next 10 years. For the current year, Swiss Re expects India's life insurance industry to record a growth rate of 6.6% and a further rise to 7.1% in 2023.
In its latest note, Swiss Re stated that the country's insurance premiums in India will grow by an average of 14% per annum in nominal local currency terms over the next decade, making India the 6th largest in terms of total premium volume by 2032 from 10th largest in 2021, as reported by PTI.
Swiss Re expects the Indian life insurance industry to grow at an exceptional rate of 6.6% in 2022 and further rise to 7.1% next year. Following this, it expects the life insurance premiums in India to cross $100 billion for the first time in 2022.
In regards to the non-life insurance market, Swiss Re in its report, stated that it has returned to a growth rate of 5.8% in 2021 after a marginal contraction in 2020.
As per the Swiss Re's note, the growth will slow down slightly in 2022 to 4.5% due to high inflation. However, the sector is expected to register a growth rate close to 8% Compounded Annual Growth Rate (CAGR) between 2023 and 2032.
Among the driving factors for the sectoral growth, Swiss Re's note expects the systematic change in India's non-life insurance sector brought by the pandemic.
Notably, Swiss Re expects the country to reign as the world's fastest-growing economy in 2022.
On the global front, in its note, Swiss Re has forecasted $7 trillion in premiums by end of the current year. However, it expects the stalling of premium growth in the global insurance markets this year, and a stronger, but still below-trend in 2023.
Swiss Re highlighted that inflation and monetary policy tightening are bolstering long-term sovereign bond yields upward, with markets pricing in both higher real yields and inflation expectations. It added that the insurers will benefit from higher investment returns that will help offset the higher claims cost.
