India is poised to lead G20 nations in insurance sector growth, with total premiums expected to increase by 7.1% in real terms from 2024 to 2028, according to a report from the Swiss Re Institute (SRI). This growth forecast far exceeds the global average of 2.4%, emerging markets’ average of 5.1%, and advanced markets’ average of 1.7%. The SRI report, titled “India’s insurance market: growing fast, with ample scope to build resilience,” attributes this surge to economic expansion, a burgeoning middle class, innovative initiatives, and regulatory support.
The report notes that in 2023, premium growth in India moderated slightly, reflecting ongoing adjustments to the post-COVID-19 era. In the life insurance segment, premium growth slowed to an estimated 4.1% from 5.9% in 2022, influenced by diminishing pandemic risk awareness and changes in tax norms for high-value policies. However, SRI anticipates robust growth in the life insurance sector, projecting a 6.7% increase in premiums from 2024 to 2028. This is attributed to rising demand for term life coverage among the middle class and the country’s youth, coupled with increased adoption of InsurTech by the industry.
In the non-life insurance segment, premium growth declined from 9.0% in 2022 to an estimated 7.7% in 2023, aligning with post-pandemic stabilization efforts. Projected annual average growth of 8.3% in non-life premiums during 2024-28 is driven by factors such as economic growth, enhanced distribution channels, government support, and a favorable regulatory environment.
The Indian government and insurance regulator have undertaken initiatives to foster industry growth, including the “Insurance for all by 2047” mission launched in November 2022. This mission aims to ensure comprehensive insurance coverage for every citizen and enterprise, with additional efforts to attract foreign investment.
Despite the positive outlook, the report highlights challenges in the face of India’s exposure to natural catastrophes, with 93% of these exposures currently uninsured. The country faces rising economic losses due to natural disasters, driven by urbanization and population concentration in major cities exposed to multiple hazards. Challenges include limited risk awareness, the need for more granular data on existing exposures, and the establishment of robust modeling capabilities. While early warning systems for tropical cyclones have seen progress, additional efforts are required for other hazards, such as floods.
