India becoming epicentre of global insurance business
India is turning out to be one of the hotspots of global insurance business. Insurance premium growth is forecast at around 7.5 per cent in the coming years. India and China have been picked as the "most promising insurance markets" in a recent study by Swiss Re, one of the world’s largest life and health insurers.
Although China and India accounted for just 2.2 per cent of the global insurance premiums, their huge economies and population size are supposedly capable of creating ample opportunities for insurance.
These two countries ranked among the top 10 of the 30 emerging insurance markets in the world, according to the Sigma report by Swiss Re, "Impressive growth prospects for emerging markets is putting them at the frontier of insurance, Among the emerging markets, China and India are very much in the spotlight on account of their huge populations, growing economic importance and fast liberalising regulatory regimes," the report said.
The Sigma study compared more than 30 markets, including those of Africa, Asia, Eastern Europe, Latin America and Middle East. Indications were that the insurance business varied greatly in size and structure among the emerging markets.
The top 10 countries accounted for almost 87 per cent of life and 66 per cent of non-life insurance premiums from emerging markets. The study indicated that some of the emerging markets like South Korea and China were among the biggest insurance markets in the world. In fact the two countries ranked 7th and 8th, respectively, in the list of largest life insurance markets worldwide.
The Swiss Re study ranked India in the 18th position among the life insurance market and 28th in the non-life insurance market in the world. "India and China are the two most challenging and promising insurance markets. In tandem with robust economic development, their insurance markets have grown spectacularly."
Life insurance premium in China has grown by an average of 23.7 per cent over the last decade, while non-life insurance premiums have grown by 10.8 per cent over the same period. Average annual growth rates for India were 12.7 per cent for life and 6.2 per cent for non-life.
The study observed that liberalisation and deregulation in these countries were "rendering these newly de-monopolised markets to be more accessible and attractive to foreign insurers". It also indicated that the emerging markets would be at the ‘frontier of insurance in the 21st century.
Non-life insurance premiums collected from emerging markets are expected to double from $123 billion in 2003 to $250 billion by 2014. Life premiums are expected to increase faster from $188 billion to $450 billion over the same period.