Page 34 - Insurance Times March 2019

IRDAI Annual Report 2017- 2018 (Excerpts)

World Insurance Scenario

A ccording to the ‘World Insurance in 2017’ report Global life premium growth is expected to improve over the

published by reinsurance major, Swiss Re, global
next few years. Life business will be challenging among
advanced markets, but strong in emerging ones. The global
economy improved considerably in 2017, with
real gross domestic product (GDP) rising 3.3%.
non-life sector is expected to improve, supported by
advanced markets due to solid economic environment,
The expansion of total direct premiums cooled to 1.5% in especially in the US. In emerging markets, non-life premium
real terms in 2017, (2016: 2.2%). Both the non-life and life growth will remain robust, but slightly lower than in the
sector slowed, but falling of life premiums in advanced recent past due to strong growth in emerging Asia and
markets were the main cause of drag on overall global ongoing soft rates.
premium growth.
Indian Insurance in the global scenario
Global life premiums increased only marginally by 0.5% to Globally, India’s share in global insurance market was 2.0
USD 2657 billion in 2017 (2016: 1.4%). percent during 2017. However, during 2017, the total
insurance premium in India increased by 10.1 percent
The slowdown was primarily driven by advanced markets,
(inflation adjusted) whereas global total insurance premium
which declined 2.7% in 2017 (2016: -1.9%) as all the regions
increased by 1.5 percent (inflation adjusted).
experienced negative growth mostly due to low interest
rates that continued to adversely affect the supply and
Globally, the share of life insurance business in total
demand for savings products. In emerging markets, life
premium was 54.32 percent. However, the share of life
premium growth remained strong at 14%, mainly driven by
insurance business for India was very high at 74.73 percent
China. In other emerging markets, the expansion was slower while the share of non-life insurance business was at 25.27
at 5.8%. The main cause was the weak performance of Latin percent.
America, while other emerging Asia and CEE developed
favorably. In life insurance business, India is ranked 10th among the
88 countries, for which data is published by Swiss Re. India’s
Global non-life premium increased to 2.8% to USD 2234
share in global life insurance market was 2.76 percent
billion in 2017 down from 3.3% in 2016. The slowdown was during 2017. However, during 2017, the life insurance
mainly due to lower growth in emerging markets, while premium in India increased by 8.0 percent (inflation
growth in advanced markets was roughly steady.
adjusted) when global life insurance premium increased by
0.5 percent.
Profitability continues to be under pressure in both the life
and non-life sectors. In the life segment, low interest rates The Indian non-life insurance sector witnessed a growth of
are affecting investment returns, while competition and 16.7 percent (inflation adjusted) during 2017. During the
regulatory changes have increased the pressure on same period, the growth in global non-life premium was 2.8
profitability as well. On the other hand, ROE of the non-life
percent. However, the share of Indian non-life insurance
sector declined for the third consecutive year as the industry
premium in global non-life insurance premium was at 1.11
experienced underwriting losses due to heavy losses from percent and India ranked 15th in global non-life insurance
natural catastrophes as well a continuing price pressure.
markets.
34 The Insurance Times, March 2019