Page 38 - Insurance Times January 2023

IRDAI UPDATE

Insurance Market in India - Overview

Appraisal of Global Insurance Market Growth in Real Premium by Region in
The global economy is slowing and the risk of inflationary the World in 2021
recession in a number of economies has increased. As per the
(In per cent)
Swiss Re Sigma research (publication no.4/2022), this economic
Regions Life Non-Life Total
slowdown and the high-inflation environment will weigh on
insurance markets. Slowing growth typically leads to lower Advanced markets 5.4 2.9 3.9
demand for insurance. The major impact of inflation will show Emerging markets 1.5 1.5 1.5
in rising claims costs in nonlife. Property and insurance are
Asia-Pacific 0.6 0.8 0.7
expected to be most impacted in the near term.
India 8.5 5.8 7.8
World 4.5 2.6 3.4
In 2021, total global insurance premiums grew by 3.4 per
cent in real terms. The non-life sector posted 2.6 per cent
Source: Swiss Re, Sigma 4/2022
growth, driven by rate hardening in commercial lines in
advanced markets. However, in China, the largest emerging
The US remains the largest insurance market in the world
market, non-life premium volumes contracted by 0.7 per
followed by China and Japan. The three together accounted
cent as the de-tariffication of motor insurance sparked fierce
for almost 56 per cent of the global premiums in 2021,
competition and rate reductions. This was partly offset by a
slightly less than that in 2020 (57 per cent). The market
10.6 per cent increase in medical insurance premiums in
share of the top 20 countries remained 90 per cent in 2021
China. The aggregate for emerging markets excluding China
and six Asian markets in the top 20 rankings of Swiss Re
was stronger, with premiums up 4.1 per cent.
(China, Japan, South Korea, India, Taiwan and Hong Kong)
contributed to 23 per cent market share. With the conflict
In life, global premium growth bounced back strongly by 4.5
in Ukraine weighing on economic growth in Europe in
per cent in both the advanced and emerging markets
particular, insurance industry growth in emerging markets
excluding China. Life premiums in China contracted by 2.6
is expected to outpace that in the advanced markets this
per cent due to weakness in life savings business caused by
year, with emerging Asia in the lead. As per Swiss Re, India
a further decline in critical illness business. Strong life
is expected to be one of the fastest growing markets in the
premium growth in advanced markets was supported by a
world over the coming decade.
surge in asset values and labour market recovery that lifted
demand for savingslinked business. Regulatory developments
Swiss Re estimates show that global premium volumes to
and a tax law change boosted the sale of annuity products
surpass USD 7 trillion in 2022 with a strong 6.1 per cent growth,
in the US. France reported the strongest premium growth
reflecting the resilience of insurance markets over the course
of 27.3 per cent, mainly driven by growth in unit-linked
of the COVID pandemic. This is based on the expectation of
business. In advanced AsiaPacific, market shifts towards
more rate hardening in non-life to counter high inflation and
protection products under regulatory encouragement
strong premium growth in emerging markets. It is estimated
supported market growth.
to be 0.8 per cent growth in global non-life premiums in 2022
The Insurance Times January 2023 33