India to become 6th largest insurance market in next decade: report


India will become the world’s sixth largest insurance market in the next 10 years, supported by a regulatory push and rapid economic expansion, according to a report.

Total insurance premiums in India will increase by an average of 14% per annum in nominal local currency terms over the next decade, making India 6th in terms of total premium volume by 2032, compared to the 10th in 2021, Swiss Re Institute stated in its report.

As for India’s life insurance sector, the report states that it will grow at an exceptional rate of 6.6% (in real terms) in 2022 and grow further at 7.1% in 2023 .

Given the expected growth rate, life insurance premiums in India are expected to cross the $100 billion mark for the first time in 2022, he said.

Regarding the non-life insurance market, the report indicates that it returned to a growth of 5.8% (in real terms) in 2021 after a slight contraction in 2020.

“Growth will slow slightly in 2022 to 4.5%, mainly due to high inflation. However, the industry is further projected to grow by nearly 8% compound annual growth rate (CAGR) between 2023 and 2032,” it said.

Read also | Axis Bank eyes 10% stake in Go Digit’s life insurance business: report

One of the drivers of sector growth is the systematic change in India’s non-life insurance sector caused by the pandemic.

This has resulted in greater risk awareness, leading to increased health insurance claims, making it the largest line of business (LoB) by premium volume in 2021.

According to the report, the global economy is on the brink of inflationary recessions, as policymakers face an increasingly difficult inflation-growth trade-off.

Swiss Re expects India to reign as the fastest growing economy in the world in 2022.

Inflation and monetary policy tightening are driving up long-term sovereign bond yields as markets price in both higher real yields and inflation expectations, he said, adding that Insurers will, over time, benefit from higher investment returns that will help offset rising claims. Cost.

Swiss Re forecasts more than $7 trillion in global premiums by the end of 2022. It expects premium growth in global insurance markets to slow this year and trend stronger, but still lower, in 2023.


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